Hang Seng Index down 1.37%
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The Hong Kong stock market showed a volatile adjustment this week. Although the easing of Sino-US relations provided positive support, the surge in US Treasury yields and the pullback in the A-share market exerted significant pressure on HK stock sentiment. As of Friday’s close, the Hang Seng Index(HSI) fell 1.37% for the week; the Hang Seng TECH Index(HSTECH) was weaker, with a weekly decline of 1.45%. The market turned downward after an early-week rally due to external negative factors, highlighting the fragility of the offshore market under the interplay of multiple factors.
At the macroeconomic level, external liquidity pressure has increased significantly. US economic data showed that inflationary pressure remains stubborn. In particular, the 30-year US Treasury yield briefly approached 5.20%, hitting a new high since 2007, which greatly suppressed the valuation expansion space for the high-beta HK stock market. Meanwhile, the Federal Reserve meeting minutes showed that most officials tend to continue raising interest rates if necessary, and the hawkish stance of the new Chairman Warsh further reinforced the market’s tightening expectations. Although China and the US achieved preliminary results in economic and trade fields, easing some geopolitical risks, the Trump administration’s threat to impose tariffs on EU automobiles has increased uncertainty in the global trade environment, disturbing foreign capital’s risk appetite for HK stocks.
On the domestic policy front, a series of positive signals are building a solid “policy bottom” for the market. First, the State Council recently studied and promoted the construction of a “unified national market,” aiming to break local protection and market barriers. This provides a broader and fairer competitive environment for logistics, consumption, and internet platform companies in HK stocks. Second, regarding industrial support policies, the National Development and Reform Commission recently held a private enterprise symposium and intensively issued support policies. Especially in the fields of AI computing power and semiconductors, the launch of “Token computing power packages” by the three major operators marks the entry of AI applications into an inclusive stage, directly boosting the prosperity of the tech sector. In addition, the HKEX continues to optimize its listing mechanisms, such as streamlining the review process for A-share companies listing in Hong Kong and promoting confidential filing mechanisms. This not only provides financing convenience for hard-tech companies but also further consolidates Hong Kong’s position as an international hub for innovative capital.
Consequently, industry sectors showed extremely strong structural divergence, with the AI and hard-tech main lines surging against the trend driven by the resonance of policies and fundamentals. The most outstanding performer this week was Security/Sfty(G3999IG.HK), which soared 27.69% for the week, becoming the market’s strongest leading. Closely following was Computer-Hardware/Perip(G3580IG.HK) with a weekly gain of 20.14%, mainly benefiting from the accelerated commercialization of AI and strong performance drivers in AI servers and PC businesses by leading companies like Lenovo Group. In addition, Elec-Semiconductor Mfg(G3677IG.HK) also performed well, rising 9.94% for the week. With the deepening of domestic substitution and expectations of a global storage cycle reversal, the semiconductor industry chain continues to receive high attention from capital.
The US stock market charted an independent course this week, with all three major indices performing strongly, and the Dow Jones hitting a record high. The Dow Jones Indus Actual(0DJIA) rose 1.53% for the week; the Nasdaq Composite(0NDQC) rose 0.26%; and the S & P 500 Index(0S&P5) rose 0.50%. The market was completely dominated by AI giants. Although Nvidia experienced volatility after its earnings report, tech stocks like Google and IBM successfully stabilized and boosted market sentiment with strong fundamentals and policy support.
US macroeconomic data and policy dynamics were the core factors influencing US stocks this week. Strong economic data, such as better-than-expected retail sales, showed that US consumer demand remains resilient. While this pushed up rate hike expectations, it also reinforced the certainty of corporate earnings. On the policy front, the Trump administration announced a $200 million quantum computing support plan, directly driving a sharp rise in related concept stocks like IBM. In addition, although signals in US-Iran negotiations once led to a sharp drop in oil prices, the situation later saw new variables, providing support for energy stocks. Overall, in the macro environment of “high inflation and strong employment,” capital in the US stock market is highly concentrated in tech giants with pricing power and technological innovation capabilities.
The A-share market experienced drastic fluctuations this week, presenting a pattern of high-volume pullback at high levels. The CSI 300(000300) edged down 0.30%. The market saw a significant drop on Thursday (May 21), with the Shanghai Composite Index briefly falling below 4,100 points. The single-day turnover hit a recent astronomical high, indicating intensified divergence between bulls and bears near historical highs and increased pressure to cash in profits. In terms of sectors, the commercialization of AI and the “unified national market” policy became the new market focus.
Domestic policies and fundamentals presented structural highlights. Data released by the National Bureau of Statistics showed that the year-on-year growth rate of total social electricity consumption in April rebounded to 6%, indicating a continuous recovery in industrial production vitality. On the policy front, the State Council executive meeting deployed the promotion of a unified national market, aiming to break local protectionism and provide a fairer competitive environment for the private economy. At the same time, the three major operators intensively launched “Token packages,” marking that AI computing power has officially entered an inclusive stage, greatly boosting market confidence in the implementation of AI applications. In addition, the process of domestic substitution in semiconductors has accelerated, with CXMT’s net profit soaring in the first quarter, showing the dual benefits of industrial capital and technological breakthroughs.
The HK33 portfolio underperformed the broader market this week, with an average weekly decline of 0.08%. Among the 33 constituent stocks, 14 recorded gains and 19 declined. Notably, KB LAMINATES(01888) surged 22.02% this week. Since its inception, the portfolio’s cumulative gains have consistently outperformed the Hang Seng Index (HSI), demonstrating the ability of selected high-quality assets to generate excess returns in the HK stock valuation repair rally. The Model Portfolio performed relatively steadily this week, with an average weekly gain of 0.40%. Core assets such as WUXI APPTEC(02359) and CATL(03750) remained firm, rising 1.64% and 0.88% respectively this week, highlighting the allocation value of the model portfolio in a volatile market.
From a technical analysis perspective, the Hang Seng Index(HSI) presents a volatile consolidation pattern. The current price has fallen below the 5-day average (-0.07%), 10-day average (-1.37%), and 20-day average (-1.57%), but remains above the 50-day average (-0.67%), indicating a weakening short-term technical pattern. The support level below the index has shifted down to the 25,000 integer mark, while the resistance level above is near the one-year high of 28,056.1 points. The technical pattern of the Hang Seng TECH Index(HSTECH) is weaker. The current price is below the 5-day average (-0.55%), 10-day average (-1.63%), and 20-day average (-1.68%), and is hovering near the 50-day moving average (-1.20%). The key support for the medium-term trend is near the one-year low of 4,619.67 points; a breach could trigger further technical selling.
Southbound capital showed a net outflow this week, with cumulative net sales of approximately HK$13.501 billion. This shift in capital flow indicates that as A-shares and HK stocks experienced a high-volume pullback on Thursday, the risk appetite of mainland investors cooled, and they chose to take profits amid intensified market volatility, exerting a certain draining effect on the short-term liquidity of HK stocks.
In summary, the main logic of the global market this week lies in the game between the “AI frenzy” and “liquidity tightening.” HK stocks saw a tug-of-war between the benefits of easing Sino-US relations and concerns over liquidity tightening triggered by high US inflation, ultimately closing the week lower. Looking ahead, the market focus will be on the policy implementation of the new Federal Reserve Chairman and the continuous progress of AI commercial applications. If US Treasury yields continue to remain at high levels, it may exert continuous pressure on global risk assets, and investors need to be wary of the pullback risk in high-valuation sectors. The market carries risks; investment requires caution.
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published on May 22, 2026