Hong Kong Stocks Under Pressure as Technology Stocks Slide

The Hang Seng Index tumbled 0.8%, or 200 points, to around 24,065 on Tuesday, as a selloff in technology stocks on Wall Street extended into Asia, with investors reducing exposure to artificial intelligence-related shares amid concerns over stretched valuations and the returns on heavy AI spending. Brent crude climbed to around US$105.90 per barrel amid concerns over Middle East supply disruptions and uncertainty surrounding the Russia-Ukraine energy truce, reigniting inflation concerns and reinforcing expectations that global interest rates could remain elevated for longer. Electronic and health technology stocks led the decline with Tencent (-0.3%), Genscript Biotech (-12.4%), Kingboard Laminates (-5.6%), Z.AI Co. (-5.3%), and Lenovo (-4.6%) among the notable laggards. Investors also looked to upcoming quarterly earnings reports for indications of corporate margins and underlying demand, while assessing whether AI-related spending could deliver sustainable returns.

The Hang Seng Index rose 0.3%, or 60 points, to close at 24,271 on Monday, supported by optimism over Beijing’s efforts to stabilize the mainland stock market and developments in China’s technology sector. Investor attention centered on Tencent Holdings, which planned to issue senior unsecured bonds denominated in US dollars and offshore yuan, with maturities potentially ranging from 10 to 30 years. Meanwhile, reports of shareholder disputes involving AI startup Moonshot AI ahead of its planned Hong Kong IPO raised concerns over corporate governance and disclosure.  Brent crude fell 1.1% to US$103.50 a barrel, easing some inflation concerns, although attacks on shipping and airports in the Gulf sustained supply risks. However, US Treasury yields remained near 24-year highs, while concerns over rising AI investment costs and upcoming US inflation data kept investors cautious. Among notable movers, Tencent (0.2%), AIA (0.9%), MiniMax (0.5%), and Meituan (0.4%) advanced.

The Hang Seng Index rose 1.8%, or 426 points, to close at 24,211 on Friday, snapping a two-session losing streak as investors bought back beaten-down stocks following recent declines. Sentiment improved as US futures advanced and Asian shares recovered from earlier losses, while oil prices retreated after US President Trump said he would not attack Iran before the midterm elections. Xiaomi surged 9.7% to HK$25.84, its biggest one-day gain since July 8, after pre-orders for its SkyNomad brand vehicles exceeded 70,000 units in the first 30 days following their September 7 launch. Financial shares also supported the rebound, although concerns over AI-sector valuations and elevated borrowing costs continued to weigh on the broader outlook. Notable movers included Tencent (3.3%), SMIC (1.5%), AIA (2.9%), and Kuaishou (5.5%). Investors looked ahead to China's September inflation figures and trade data following the resumption of mainland markets after the Golden Week holiday.