Hong Kong Stocks Hit 8-week High

The Hang Seng Index was little changed, to close 25,511 on Tuesday, tracking overnight weakness on Wall Street as technology shares came under pressure. The decline was limited as strength in Hong Kong’s IPO market helped cushion broader risk-off sentiment. Investors remained cautious following Monday’s sharp sell-off in Alibaba after the e-commerce giant announced an HK$80 billion share placement to fund its artificial intelligence infrastructure expansion. The move raised concerns over potential dilution and the company’s rising AI-related capital spending. Meanwhile, investors continued to watch Shein’s Hong Kong IPO, which could raise up to US$1.8 billion at a valuation of about US$27 billion. Market attention also remained on upcoming US economic data and Federal Reserve policy signals for clues on the interest-rate outlook. Notable laggards included Meituan (-6.7%), MiniMax (-4.0%), and Xiaomi (-2%). While Kingboard Laminates and Wuxi Biologics rose 13.8% and 14.8% respectively.

The Hang Seng Index slipped 1.9%, or 492 points, to close at 25,517 on Monday, as technology stocks led the sell-off amid profit-taking and renewed concerns over the sector’s elevated valuations and heavy artificial-intelligence spending. Alibaba Group was a key focus after announcing a US$10.2 billion (HK$80 billion) Hong Kong share placement at a 3.6% discount to its previous close to fund its AI expansion, raising concerns over potential share dilution and the company’s substantial capital spending on AI infrastructure. Meanwhile, Shein officially launched the bookbuilding process for its Hong Kong IPO on Monday. The fast-fashion company is offering 280 million shares at HK$47.60 to HK$49.50 each, potentially raising around HK$13.9 billion (US$1.77 billion). Trading is expected to begin on September 1. Among notable laggards included Tencent (-3.7%), SMIC (-7.9%), Xiaomi (-4.1%), Z.AI Co. (-10.8%), and Meituan (-2.7%).

The Hang Seng Index rose 1.2%, or 311 points, to close 26,009 on Friday, extending gains from the previous session as investors welcomed softer local inflation. Hong Kong's annual inflation rate eased to 1.7% in July from 2.0% in each of the previous two months. Electronic technology, producer manufacturing, and financial shares led the advance. Investors assessed reports that fast-fashion retailer Shein had postponed its Hong Kong IPO to September following a delay in taking investor orders. Among individual stocks, J&T Global Express was among the strongest performers after reporting a 124% year-on-year jump in first-half adjusted net profit to US$350.6 million, driven by robust parcel growth and expanding international operations. Tencent (1.2%), Z.AI Co. (10.4%), MiniMax (11.9%), Xiaomi (4.5%), and Kuaishou (2.3%) advanced. However, gains were tempered by elevated oil prices, with Brent crude holding above US$93 per barrel, keeping investors cautious about the inflation outlook.