HSI down 1.63%
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The Hong Kong stock market showed a trend of surging early in the week followed by a pullback, with the easing of China-US relations and fluctuating US inflation data becoming the main factors affecting market sentiment. As of Friday’s close, the Hang Seng Index(HSI) fell 1.63% for the week; the Hang Seng TECH Index(HSTECH) performed even weaker, with a weekly decline of 3.17%. Although the indices initially rose at the beginning of the week, boosted by the positive news of the high-level China-US meeting, the subsequently released US April CPI data far exceeded expectations. This dashed market hopes for a Federal Reserve rate cut, causing US Treasury yields to soar, which in turn suppressed the valuations of Hong Kong tech stocks and triggered a pullback towards the end of the week.
From the external macro environment, this week’s biggest market disturbance still came from the repricing of US inflation and interest rate expectations. The US April unadjusted CPI rose 3.8% year-on-year, higher than the market expectation of 3.7%; core CPI rose 2.8% year-on-year, hitting a new high since September 2025, indicating that inflationary pressures are re-emerging. Meanwhile, initial jobless claims for the week ending May 9th came in at 211,000, higher than expected, suggesting that while there is marginal loosening in the job market, overall resilience remains. The combination of stubborn inflation and stable employment further shattered market expectations for a short-term rate cut, and even reignited concerns about rate hikes. Affected by this, the 2-year US Treasury yield rose above 4%, and the 30-year US Treasury yield briefly broke through 5%. The US dollar remained strong, and the elevated risk-free interest rate posed significant capital outflow pressure on the Hong Kong stock market as an offshore market.
From a policy perspective, Hong Kong stocks still have medium-term support. Mainland China’s steady growth policies continue to exert force; liquidity stabilization, support for technological innovation, and industrial upgrade orientations help improve profit expectations for Hong Kong-listed internet, tech hardware, new energy, and high-end manufacturing sectors. If subsequent policies on credit expansion, boosting domestic demand, and stabilizing the real estate market continue to be implemented, expectations for a fundamental repair in Hong Kong stocks are expected to strengthen further. At the same time, the Government Work Report emphasized the “synergy of computing power and electricity,” and the central bank’s support for the development of hard technologies such as integrated circuits will also benefit the Hong Kong tech sector through industry chain mapping, sentiment transmission, and the allocation preferences of southbound funds. At the local Hong Kong level, capital market reforms continue to advance, including optimizing the listing system, supporting the financing of specialized and new technology enterprises, and attracting the return of China concept stocks, which helps enhance the market’s long-term competitiveness. Externally, the phased easing of China-US relations is also conducive to reducing the risk premium of Hong Kong stocks. Overall, although short-term pressure from high US Treasury yields remains, the medium-term valuation repair logic for Hong Kong stocks has not been broken.
In addition to macro data, global trade and geopolitical factors also disturbed market sentiment. The Trump administration once again released strong signals on trade policy, threatening to impose tariffs on EU automobiles if no agreement is reached before July 4th, and seeking an expansion of China’s purchases of US agricultural products. This series of statements exacerbated uncertainty in the global trade environment and also posed potential suppression on market risk appetite.
In terms of industry performance, the Hong Kong stock market this week showed relatively obvious structural differentiation, with capital focus further concentrating on niche industrial directions. According to the latest industry data, the top three performing industries for the week were Telecom-Cable/Satl Eqp(G4893IG.HK), with a weekly increase of 14.96%, reflecting a significant rise in market attention to communication infrastructure, satellite communications, and related equipment chains; Retail/Whlsle-Bldg Prds(G5211IG.HK), with a weekly increase of 14.94%, indicating that under the support of steady growth policy expectations and domestic demand repair logic, niche directions related to infrastructure and engineering investment began to attract capital attention; Computer Sftwr-Enterprse(G3583IG.HK), with a weekly increase of 8.48%, reflecting the support for software asset valuations from the deepening of AI applications, corporate digital transformation, and the recovery of the tech growth style.
The US stock market this week experienced a “dip first, then rise” trend under the impact of high inflation data, but closed the week in the green, with all three major indices hitting record highs. The Dow Jones Indus Actual(0DJIA) rose 0.92% for the week, successfully breaking through the 50,000-point mark; the Nasdaq Composite(0NDQC) rose 1.48% for the week; and the S & P 500 Index(0S&P5) rose 1.38% for the week. Although CPI data exceeding expectations triggered market panic mid-week and tech stocks came under pressure, AI giants such as Nvidia and Cisco quickly stabilized and boosted market sentiment with their strong financial reports and product strength, demonstrating the powerful capital-attracting ability and market dominance of the US “Magnificent Seven” tech stocks.
US macroeconomic data exhibited the characteristics of “high inflation, strong employment,” forcing the Federal Reserve to face the dilemma of a policy pivot. In addition to CPI data exceeding expectations, the US April retail sales month-on-month rate recorded 0.5%. Although the growth rate slowed compared to the previous value, it still showed that consumer demand remains resilient. On the policy front, the Federal Reserve welcomed its new Chairman, Kevin Warsh, and the market is adapting to his potentially more hawkish or independent monetary policy style. In the coming period, his policy statements and judgments on inflation, employment, and financial conditions will become important variables in global asset pricing.
The A-share market this week experienced “rollercoaster-like” emotional fluctuations, presenting a pattern of high-level volatility. The CSI 300(000300) dipped slightly by 0.25%. Market turnover remained at a massive level of 3 trillion yuan, showing that capital activity remains extremely high, but the obvious pullback on Friday (May 15th) also exposed profit-taking pressure near historical highs. In terms of sectors, AI hardware, new energy vehicles, and sectors with a “price hike” logic such as live pigs and industrial gases became the focus of capital, with market style oscillating between tech growth and defensive sectors.
The domestic policy and fundamental aspects present a structural characteristic of “loose externally, tight internally.” Macro data shows that RMB loans increased by 8.59 trillion yuan in the first four months, but new loans in April alone showed a rare negative value, and the household sector continued to deleverage, indicating a slowdown in credit demand. Against this background, the central bank injected 300 billion yuan of liquidity through outright reverse repo operations to maintain stability in the capital market. In terms of industrial policy, the Government Work Report listed the “synergy of computing power and electricity” as a key focus, and the central bank established a 500 billion yuan technological innovation relending facility to support hard technologies such as integrated circuits, providing a solid policy foundation for the tech sector. At the same time, the high-level China-US meeting established a “constructive strategic stability relationship,” eliminating the market’s biggest external uncertainty and greatly boosting risk appetite.
The Top 33 portfolio underperformed the broader market this week, with an average weekly decline of 3.53%. Among the 33 constituent stocks, 10 stocks recorded gains and 23 declined, with TSUGAMI CHINA(01651) rising 5.65% this week. Since its inception, the cumulative gain of this portfolio has consistently outperformed the Hang Seng Index (HSI), demonstrating the ability of selected high-quality assets to generate excess returns during the Hong Kong stock valuation repair rally. The Model Portfolio also performed poorly this week, with an average weekly decline of 0.72% and only one rising stock, CATL(03750), which rose 4.45% this week, showing that the model portfolio is facing certain adjustment pressures under the current rapid rotation of market styles.
From a technical analysis perspective, the Hang Seng Index(HSI) shows a pattern of surging early and pulling back later. The current price has fallen below the 5-day average price (-1.28%), 10-day average price (-1.18%), and 20-day average price (-0.77%), but is still running above the 50-day average price (+0.76%), indicating a weakening short-term technical pattern. The support level below the index has moved down to the 25,500-point area, while the resistance level above is near the one-year high of 28,056.1 points. The Hang Seng TECH Index(HSTECH) has an even weaker technical pattern, with the current price below the 5-day average price (-2.30%), 10-day average price (-1.94%), and 20-day average price (-1.02%), and hovering near the 50-day moving average (+0.18%). The key support for the medium-term trend is at the 4,800-point integer mark; if this is lost, it may trigger further technical selling.
In terms of capital flow, southbound funds overall showed a net inflow trend this week, with a cumulative net inflow of approximately 28.757 billion HKD. Against the backdrop of intensified market volatility, southbound funds maintained a net inflow, indicating that the willingness of mainland funds to allocate to Hong Kong stocks has not significantly weakened, which to a certain extent provides support for Hong Kong stock liquidity.
In summary, the main logical thread of the global market this week lies in the game between “recurring inflation” and the “AI frenzy.” Hong Kong stocks saw a tug-of-war between the benefits of easing China-US relations and concerns over liquidity tightening triggered by high US inflation, ultimately closing the week lower. Looking ahead, the market focus will center on the policy statements of the new Federal Reserve Chairman and the subsequent progress of China-US trade relations. 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 pullback risks in high-valuation sectors. The market carries risks; investment requires caution.
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published on May 15, 2026