Hong Kong Stocks Edge Lower

The Hang Seng Index fell 0.2%, or 68 points, to around 24,280 on Wednesday, as losses in financial and technology services stocks outweighed gains in energy, electronic technology and retail shares. Asian chipmakers rebounded following heavy losses, although concerns over AI valuations, Chinese semiconductor competition and the returns on AI infrastructure spending persisted. Brent crude rose to around US$106.60 a barrel amid escalating attacks on Saudi energy infrastructure, heightening concerns over disruptions to Persian Gulf supplies and renewed inflationary pressure. Meanwhile, China's producer price inflation accelerated to 5.0% year-on-year in September, its strongest increase since June 2022, while consumer inflation edged up to 0.9%, below expectations of 1.0%. Notable decliners were Akeso (-10.1%), Z.AI Co. (-1.8%), and AIA (-1.0%). Investors also awaited US September CPI data for clues on the Federal Reserve's interest-rate outlook.

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.