HSI up 0.26%
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Hong Kong equities traded in a narrow range this week, with the two major indices diverging. The Hang Seng Index(HSI) rose 0.26% for the week, while the Hang Seng TECH Index(HSTECH) fell 0.77%. The HSI ended modestly higher, supported by favorable domestic policy and continued Southbound inflows, while technology shares were pressured by soaring global bond yields and escalating U.S.-Iran tensions. Markets opened weak in the first half of the week amid geopolitical stress and then stabilized gradually; sentiment improved on Thursday after Fed Governor Waller signaled support for holding rates unchanged.
On the macro side, the U.S.-Iran conflict continued to escalate. U.S. strikes reportedly targeted islands in southern Iran and Revolutionary Guard assets, while Iran vowed retaliation. Shipping security in the Strait of Hormuz came under severe threat. International oil prices surged by more than 5%, with WTI above $90/bbl and Brent above $95/bbl, boosting risk-off sentiment. Global bond markets saw heavy selling: the U.S. 10-year Treasury yield briefly rose to 4.79%, the highest since January 2025; Japan’s 10-year JGB yield broke above 3% for the first time in 30 years; and the UK 30-year gilt yield reached a new high since 1998. Rising long-end rates broadly pressured Hong Kong equity valuations. Expectations for a September Fed hike remained unsettled: Governor Waller leaned dovish, while Governor Barr said he would support hikes if inflation failed to ease; Société Générale even projected three Fed hikes before next March. In China, the PBOC extended the maximum mortgage tenor for individuals from 30 to 40 years, supporting property-chain expectations. A new RMB 800 billion policy-finance facility was officially launched, with an initial RMB 460 million already deployed. August manufacturing PMI rose to 49.8, up 0.6ppt month-on-month, but remained below the 50 threshold.
Sector rotation in Hong Kong was pronounced. The top three O’Neil industry gainers were Comml Svcs-Advertising(G7310IG.HK), up 9.9%; Computer-Hardware/Perip(G3580IG.HK), up 7.16%; and Media-Books(G2731IG.HK), up 6.63%. Advertising and media outperformed, catalyzed by AI applications. Banks were strong this week, with high-dividend lenders benefiting from the global uptrend in interest rates. Biotech was relatively resilient, with continued safe-haven inflows. Nonferrous metals and transportation strengthened on Thursday, while mainland property names also saw policy-driven support. Weak sectors included NEVs, optical modules, and airlines, with growth tech under pressure.
All three major U.S. indices rose this week. The Dow Jones Indus Actual(0DJIA) gained 0.24%; the Nasdaq Composite(0NDQC) gained 0.69%; and the S & P 500 Index(0S&P5) gained 0.47%. On Thursday, all three advanced on a dovish Fed signal.
AI-related catalysts were the key U.S. market theme this week. OpenAI launched GPT-6 Astra and declared an “AGI era,” with reported cost reduction of 57% and time reduction of 47%. Nvidia announced a $12.93 billion acquisition of Hugging Face, the world’s largest open-source AI platform, strengthening its ecosystem positioning. Broadcom’s Q3 revenue grew 86% YoY, while AI semiconductor revenue surged 221% YoY to $16.7 billion. On macro data, August ISM manufacturing PMI was 54.6, below the 55.2 consensus; ISM services PMI was 55.4, marking 26 consecutive months of expansion, while the prices index rose to 72.6, the highest since August 2022. August ADP employment increased by only 38k vs. 48k expected. EIA crude inventories dropped sharply by 4.45 million barrels. Crypto-linked stocks rallied, with Circle up over 16% and Coinbase up over 10%. A large-scale AI service outage occurred on Thursday, affecting ChatGPT, Claude, and Grok. U.S.-listed Chinese stocks were broadly under pressure, with the Nasdaq Golden Dragon Index declining on multiple days.
A-shares moved lower in volatile trading this week, with turnover gradually shrinking. The CSI 300(000300) fell 1.33%. Sector-wise, bank shares pulled back after hitting fresh highs early in the week, with the six major state-owned banks closing lower collectively. Shipping, insurance, and nonferrous metals strengthened on Thursday. Themes such as lab-grown diamonds and liquid-cooling servers were active. Core AI names were generally weak, and the solar sector continued to adjust.
Policy signals remained constructive. Ten ministries jointly issued the “15th Five-Year Plan” for SME development, targeting a cumulative 15% increase in per-capita operating revenue by 2030 and launching Phase II of the national SME development fund. Seven ministries promoted expansion and upgrading of goods consumption, targeting total retail sales around RMB 60 trillion by 2030. MIIT launched a special program to cultivate AI application service providers, targeting over 2,000 providers in the resource pool by the end of 2026. With A-share interim reports completed, 63.3% of 5,548 listed firms posted YoY revenue growth; STAR Market net profit surged 437.6% YoY; PetroChina’s 1H net profit exceeded RMB 100 billion, retaining its “most profitable” title. On tariffs, the U.S. is considering additional tariffs on foreign chips, while China’s MOFCOM urged the U.S. to remove sanctions on China.
The Top 33 portfolio delivered steady performance this week, with an average weekly gain of 0.96%; among 33 constituents, 17 rose, and 16 declined. Angelalign(06699) led with +11.46%, O’Neil Score 83, RS Rating 91, and latest-quarter revenue growth of 42.98% YoY. CM BANK(03968) rose 8.83%, with O’Neil Score 70, RS Rating 77, and Industry Group Rank 12 (a strong industry). BANK OF CHINA(03988) rose 8.69%, with O’Neil Score 70, RS Rating as high as 88, and the same Industry Group Rank of 12. Since inception, the portfolio’s cumulative return has consistently outperformed the Hang Seng Index (HSI), reflecting stock-selection alpha. The Model Portfolio posted an average weekly decline of 1.42%. MIDEA GROUP(00300) rose 2.08%, with O’Neil Score 70, EPS Rating 92, RS Rating 85, and Industry Group Rank 40. BEONE MEDICINES(06160) fell 1.6%, with O’Neil Score 75, RS Rating 84, Industry Group Rank 25, and latest-quarter revenue growth of 29.63% YoY. INNOVENT BIO(01801) fell 4.74%, with O’Neil Score 77, EPS Rating 74, Industry Group Rank 25, and latest-quarter revenue growth of 44.76% YoY.
Technically, the Hang Seng Index(HSI) remains neutral-to-constructive in the short term. Spot is above its 5-day (+0.93%), 10-day (+0.63%), and 20-day (+0.48%) moving averages, and above the 50-day (+2.58%), but only -0.04% from the 200-day average. First support is 25,000, second support is near the 200-day zone around 24,500, with strong support at the one-year low of 22,518.0. On the upside, first resistance is 26,000, second resistance is around the prior high near 26,500, and strong resistance is at the one-year high of 28,056.1. The Hang Seng TECH Index(HSTECH) remains technically weak: spot is only above the 5-day (+0.54%), but below the 10-day (-0.14%), 20-day (-2.2%), 50-day (-2.43%), and 200-day (-10.16%) averages. It is down 31.95% from the one-year high, and the medium- to long-term correction trend has yet to reverse. Support is near the one-year low around 4,230, while resistance is near the 4,700 and 5,000 round-number levels.
Southbound funds recorded continued net inflows this week, with cumulative net buying of about HKD 7.363 billion. Against the backdrop of global bond volatility and rising geopolitical risk, persistent Southbound inflows indicate that mainland investors remain committed to long-term allocation to Hong Kong core assets. Banks and high-dividend blue chips were key allocation targets, and the relative attractiveness of income assets continues to rise in an up-rate cycle.
This week, global markets were driven by three core themes: “escalating geopolitical conflict,”“global bond sell-off,” and “AI industry milestones.” Hong Kong equities traded range-bound under external rate pressure and geopolitical uncertainty, while banks and biotech showed relative strength, supported by sustained Southbound inflows. Looking ahead, market focus will center on the Fed’s September meeting and CPI data, developments in U.S.-Iran tensions and Strait of Hormuz transit security, Apple and Huawei’s September product events, and post-results valuation re-rating. We recommend focusing on high-dividend blue chips and AI value-chain opportunities. Markets involve risks; investment requires caution.
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published on September 4, 2026