Hong Kong Stocks Fall as AI Concerns Persist

The Hang Seng Index fell around 1.0%, or 223 points, to about 23,960 on Tuesday as Hong Kong equities resumed trading after Monday’s public holiday, with technology services and retail shares leading losses. Technology stocks remained under pressure amid concerns over the financing of AI infrastructure, elevated borrowing costs and uncertainty over whether heavy investment would deliver sufficient returns. Notable laggards were Lenovo (-5.8%), Tencent fell (-2.0%), Innovent Biologics(-4.4%), MiniMax (-1.4%), and Semiconductor Manufacturing International Corporation (-1.5%). China's decision to keep its benchmark lending rates unchanged at 3.00% and 3.50% offered no additional monetary easing, although stronger-than-expected third-quarter economic growth reduced the immediate pressure for stimulus. Retail trade fell 2.01% and producer manufacturing declined 1.38%, while gains in energy minerals (+0.16%) and electronic technology (+0.34%) provided limited support.

The Hang Seng Index rose 0.5%, or 124 points, to close at 24,187 on Friday, recovering from the previous session’s losses as Asian equities rebounded following a selloff in technology and semiconductor stocks, with dip buyers stepping in amid easing concerns over global market volatility. Lower yields helped ease pressure on equities, while investors bought beaten-down shares following recent market volatility and tracking gains in Wall Street. The recovery in regional chipmakers also helped lift risk appetite, although uncertainty surrounding the sustainability of artificial intelligence spending continued to weigh on parts of the technology sector. Investors also awaited Federal Reserve Chair Kevin Warsh’s comments for clues on the US interest-rate outlook. Hong Kong’s business confidence data was also due later in the day. Notable movers included Lenovo (6.2%), Kingboard Laminates (2.5%), Z.AI Co. (1.2%), and AIA (1.0%). The index is closed on Monday due to a public holiday.

The Hang Seng Index slipped 1.0%, or 251 points, to close at 24,063 on Thursday, as hotter-than-expected US inflation data heightened concerns over further Federal Reserve rate hikes, weighing on global technology and AI-related shares. The weakness followed another sharp decline on Wall Street, where the Nasdaq fell 1.88% on Wednesday, posting its biggest one-day drop since July. In the region, technology and semiconductor shares remained under pressure, with investors awaiting TSMC's earnings for further signals on semiconductor demand. Meanwhile, Brent crude eased to around US$104.67 a barrel, although tensions near the Strait of Hormuz continued to raise concerns over energy supplies and inflation. Investors also watched Transsion Holdings Hong Kong debut, as the smartphone maker sought to raise up to HK$3.36 billion amid rising memory costs and margin pressures. Notable laggards were Lenovo (-14.5%), Z.AI (-10.2%), Tencent (-1.3%), Kingboard Laminates (-9.6%), and SMIC (-4.0%).