Hong Kong Stocks Recover After Early Selloff

The Hang Seng Index gained 0.3%, or 74 points, to close at 24,345 on Tuesday after tumbling in the morning, as the market recovered from early losses despite continued pressure on technology stocks. Sentiment remained fragile amid a global selloff in AI-related shares, driven by concerns over intensifying competition in the semiconductor industry, elevated valuations and the returns on heavy AI spending. Rising geopolitical tensions and Brent crude prices near US$105 a barrel also kept inflation and interest-rate concerns in focus. Tencent Holdings drew strong investor demand for its planned bond sale, attracting more than US$15.5 billion in orders for an offering targeting at least US$4.5 billion, even as investors scrutinized technology companies’ AI investment plans. Market participants also awaited upcoming US inflation data and corporate earnings. Notable movers were Xiaomi (2.0%), AIA (2.0%), Meituan (0.6%) and Geely (3.1%).

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.