Hang Seng Index rose 1.63%
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Hong Kong equities continued their choppy upward trend this week, with the Hang Seng Index(HSI) rising 1.63% and the Hang Seng TECH Index(HSTECH) edging up 0.14%. From a market-structure perspective, HSI clearly outperformed HSTECH, reflecting that investor preference for high-dividend, financial, and certain cyclical sectors remains stronger than for high-valuation growth technology names. This week’s Hong Kong market performance was supported on one hand by expectations of mainland China’s market-stabilization policies, while on the other hand it was affected by volatility in U.S. tech stocks, a sharp rise in international oil prices, and rising global interest rates. Pressure on mega-cap tech leaders and the semiconductor supply chain limited HSTECH’s upside elasticity.
From policy and macroeconomic perspectives, the main support for Hong Kong equities this week still came from improving mainland macro expectations. Regulators repeatedly stated that they would adopt comprehensive measures to fully maintain stable market operations, continue enhancing capital market resilience, and further improve convenience for foreign investors’ participation in capital markets. This is particularly important for Hong Kong, as its market is itself a key gateway for international capital to allocate to Chinese assets. At the same time, China’s Ministry of Commerce said China and the U.S. are soliciting opinions on tariff reduction arrangements and will push for implementation as soon as possible, preserving market expectations for improvement in the external trade environment and corporate earnings recovery. On the domestic policy front, the market also continued to price in signals including service-sector capacity expansion and quality upgrades, direct-financing support for technology and innovation enterprises, and potentially more room for monetary easing in Q3. Together, these factors improved judgments on China’s growth momentum in the second half of the year. For Hong Kong equities, before earnings expectations are meaningfully revised upward, stability in policy expectations itself is an important source of valuation support.
On external factors, Hong Kong equities this week remained under the intertwined influence of multiple variables. Escalation in the Middle East pushed international oil prices sharply higher, with Brent crude briefly breaking above USD 100, raising concerns about imported inflation and a global growth slowdown. The U.S. announcement of additional 10%–12.5% tariffs on multiple economies also raised uncertainty around global trade and supply chains again. Meanwhile, elevated U.S. Treasury yields and a stronger U.S. dollar also pressured Hong Kong equity valuations, especially growth-stock valuations. For Hong Kong equities, the current external backdrop does not constitute a clear tailwind; therefore, their relatively resilient performance better illustrates the supporting role of mainland policy expectations and the allocation value of Chinese assets. In the near term, if external inflation and geopolitical pressures do not clearly ease, Hong Kong equities are still likely to maintain a volatile recovery pattern.
By sector, this week’s leading gainers in Hong Kong were mainly concentrated in two themes: resources and hardware. In O’Neil industry groups, the top gainers were Mining-Gold/Silver/Gems(G1040IG.HK), up 14.96% for the week; Mining-Metal Ores(G1099IG.HK), up 14.53%; and Computer-Hardware/Perip(G3580IG.HK), up 12.05%. The strong rally in precious metals and metal mining mainly reflected renewed allocation appetite toward resource assets amid rising geopolitical risks, rebounding inflation expectations, and greater commodity price volatility. Especially with rapidly rising oil prices and recurring global risk-off sentiment, gold- and nonferrous-resource-related assets attracted more attention. Meanwhile, Computer-Hardware/Perip (G3580) ranked among the top three gainers, indicating that although large-cap tech stocks saw greater overall volatility, some hardware subsectors still offered thematic and flow-driven trading opportunities. The market has not fully exited the tech track; rather, capital is rotating from high-valuation platform tech names toward more elastic or catalyst-driven hardware niches.
U.S. equities pulled back overall this week: the S & P 500 Index(0S&P5) fell 0.66%, the Nasdaq Composite(0NDQC) fell 1.5%, and the Dow Jones Indus Actual(0DJIA) fell 0.83%. Structurally, growth technology was under the most pressure, with the Nasdaq leading declines, suggesting a moderation in risk appetite. AI-related trades showed clear divergence during the week: while some chip and memory stocks rebounded, large-cap tech broadly weakened amid earnings and capex expectation disturbances; energy and banks were relatively defensive, reflecting rotation from high-valuation growth into defensive and pro-cyclical directions.
This week’s U.S. equity correction was mainly driven by the interaction of rates, inflation expectations, and policy uncertainty. U.S. initial jobless claims for the week ended July 18 fell to 187,000, below the expected 212,000, indicating continued labor-market resilience and weakening bets on a rapid Fed pivot to easing. Meanwhile, escalating Middle East tensions drove strong gains in WTI and Brent crude, with Brent briefly above USD 100, reigniting inflation concerns and pushing 2-year and 10-year U.S. Treasury yields higher, thereby pressuring high-valuation tech stocks. On policy, the U.S. decision to impose additional 10%–12.5% tariffs on dozens of economies further heightened market caution toward global trade and corporate profit prospects. Against this backdrop, skepticism over returns on massive AI capital expenditures increased, and major names such as Tesla (TSLA) and Google came under clear pressure, causing the Nasdaq to underperform the broader market.
A-shares were relatively resilient this week, with CSI 300(000300) up 2.65%. From the tape, the index rebound was mainly driven by heavyweight sectors and some policy-beneficiary themes, but market turnover still showed contraction, with the final trading day’s volume 24.32% below the 50-day average, indicating limited willingness of incremental capital to chase higher prices. Sector rotation continued to accelerate: new-energy chains such as lithium batteries, photovoltaics, and power grids were relatively strong, while previously hot AI hardware directions such as semiconductors and computing-power hardware corrected notably. Market style switched rapidly between growth and pro-cyclical themes.
The strength in A-shares this week was still fundamentally driven by policy backstops and efforts to stabilize expectations. Regulators repeatedly emphasized “fully maintaining stable market operations and enhancing capital market resilience,” which helped stabilize risk appetite. Shanghai introduced “20 measures” on direct financing, while medium- to long-term plans for renewable energy and the sports industry also provided policy catalysts for related sectors. Externally, U.S. tariff hikes, rising global oil prices, and higher U.S. Treasury yields still disturbed export chains and growth valuations; however, the Ministry of Commerce’s statement that China and the U.S. are soliciting opinions on tariff reduction arrangements eased some trade concerns. On liquidity, A-share turnover was about RMB 2.21 trillion, but margin financing balance saw a net outflow of RMB 98.704 billion last week, indicating short-term sentiment remained cautious. Therefore, the market is more likely to maintain a structural trend, with low-valuation heavyweights, policy-beneficiary sectors, and high-earnings-visibility leaders more likely to attract capital attention.
In portfolio performance, Top 33 rose 1.90% on average this week, with 21 stocks up and 12 down. The best performer was BOC HONG KONG(02388), up 10.22%, and overall performance was better than the Hang Seng Index (HSI)’s 1.63%. The model portfolio rose 2.71% this week, outperforming HSI over the same period. Among constituents, MIDEA GROUP(00300) rose 2.71%, with an EPS Rating of 93, an RS Rating of 85, and an O’Neil Score of 69, indicating that fundamentals and relative strength remained resilient. From a relatively longer-term perspective, HK33 continued to outperform HSI this week, reflecting that a selectively constructed leader portfolio still has certain alpha advantages in the current volatile environment.
Technically, Hong Kong equities remain in a choppy but moderately strong pattern, though upside momentum has slowed. The Hang Seng Index(HSI) is currently about 0.6%, 3.44%, and 1.34% above its 10-day, 20-day, and 50-day moving averages, respectively, suggesting that short- and medium-term trends are still intact. However, it remains 3.11% below its 200-day moving average, indicating that the medium- to long-term recovery is not yet complete. HSI is still about 11.02% below its 52-week high, and no substantive breakout structure has formed. The Hang Seng TECH Index(HSTECH) is weaker than HSI, currently 1.74% below its 10-day MA, 2.17% below its 50-day MA, and 12.55% below its 200-day MA, indicating that the technology sector remains in a repeated bottom-building phase. In the short term, key HSI support is near the 10-day and 20-day lines, followed by around 24,500. On the upside, resistance is in the 25,000–25,200 zone; only a confirmed, volume-backed break and hold would open room for further recovery to higher platforms. For HSTECH, resistance remains near 4,700, while downside support is first at the 20-day line and then the prior consolidation zone.
For Southbound capital flows, net inflow this week was HKD 2.978 billion. Overall buying remained net positive, but the pace clearly diverged: cautious at the start of the week, a notable midweek return of inflows, and a shift back to net selling on Friday. These flow patterns suggest mainland capital has not turned systematically bearish on Hong Kong equities, but is rotating structurally among high-dividend, pro-cyclical, and internal tech segments. If U.S. Treasury yields continue to rise and global tech remains under pressure, Southbound funds may tilt more toward cash-flow-stable sectors such as financials, energy, telecom, and utilities. If mainland policy support continues to strengthen and China-U.S. tariff reduction arrangements make positive progress, allocation value in Hong Kong internet and consumer leaders may also recover.
This week, global market themes continued to center on rising geopolitical risks, higher oil prices, rising U.S. Treasury yields, and divergence in AI trades. Supported by mainland market-stabilization policies, Hong Kong equities remained relatively stable. Going forward, key points to watch include whether Fed policy expectations tighten further due to changes in employment and oil prices, progress in China-U.S. tariff reduction arrangements, and whether Hong Kong equities can break through key resistance with improved trading volume. Investors are reminded that market rotation is currently fast; priority should be given to quality stocks in strong industries where fundamentals and capital flows resonate, while remaining alert to volatility risks from geopolitical developments and tariff changes.
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published on July 24, 2026