Hong Kong Stocks Fall on Tech Sell-Off

The Hang Seng Index slipped 2.1%, or 533 points, to 25,473 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. Notable laggards included Tencent (-2.6%), Xiaomi (-3.6%), Z.AI Co. (-5.7%), MiniMax (-6.1%), and Meituan (-1.8%).

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.

The Hang Seng Index rose 0.8%, or 203 points, to close at 25,698 on Thursday, as gains in healthcare and technology stocks lifted the market. Healthcare and biotechnology stocks were among the strongest performers. Everest was the standout after reporting a 157.3% year-on-year increase in first-half revenue to RMB1.15 billion and a swing to RMB97.2 million in non-IFRS net profit, driven largely by its NEFECON kidney-disease treatment. Technology stocks also advanced, with Tencent reporting a 176% year-on-year jump in second-quarter capex to RMB52.8 billion on AI investment, while revenue rose 11% and adjusted earnings gained 9%. Sentiment was further supported by China keeping its one-year and five-year LPRs unchanged at 3.00% and 3.50%. Global bond yields also eased after the US Treasury doubled its long-term debt buybacks, supporting risk appetite. Notable movers included Tencent (0.9%), Xiaomi (1.2%), CSPC Pharmaceutical (9.6%), Genscript Biotech (13.6%), and MiniMax (6.2%).