HSI fell 3.3%
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Hong Kong equities remained under pressure this week, with both major indices posting sizable declines. The Hang Seng Index(HSI) fell 3.3% for the week, declining for four consecutive sessions from above 25,400 to below 25,000. The Hang Seng TECH Index(HSTECH)dropped 5.45% and is now only 2.14% above its one-year low, indicating a severe setup. Large-model concept stocks continued to retrace, and tech led the weekly decline. In contrast, cyclical sectors such as oil & gas, coal, and power advanced against the trend as Middle East tensions pushed commodity prices higher. Southbound capital recorded net inflows throughout the week and added positions during the pullback, providing a partial stabilizing effect.
On the macro front, external risks intensified materially. The Middle East conflict escalated further: U.S. forces reportedly destroyed five Iranian oil tankers; Iran struck a U.S. base in Jordan and established a maritime “sanction zone”; Houthi forces in Yemen took a strategic position in the Red Sea. Shipping through both the Strait of Hormuz and the Red Sea was severely disrupted. Brent broke above USD 109/bbl, surging 7.98% in a single day; WTI rose 8.2% to USD 103.93/bbl, sharply lifting global inflation expectations. The U.S. 10-year Treasury yield jumped to 4.965%, up 12.6 bps in one day. The U.S. Treasury’s long-bond buyback was only USD 5.19 billion, below the USD 6.0 billion ceiling, triggering bond-market selling. Markets now price the probability of a September Fed hike above 70%, and fully price another hike by October at the latest. The ECB raised rates by 25 bps to a 2.5% deposit facility rate and revised up inflation expectations for the next two years. This synchronized global tightening exerts multi-layer valuation pressure on Hong Kong stocks.
Domestically, the “15th Five-Year Plan for Building a Financial Powerhouse” was officially released, setting a clear target to establish the broad framework of a modern Chinese financial system by 2030. China’s Ministry of Finance issued RMB 300 billion of special sovereign bonds and supported eight central financial enterprises in replenishing RMB 360 billion of Core Tier 1 capital, potentially leveraging RMB 4 trillion of asset expansion. August CPI rose 0.8% YoY and core CPI rebounded to 1.0%; PPI rose 3.8% YoY, suggesting a mild recovery in inflation alongside gradual domestic-demand repair. Foreign trade grew 17.6% in the first eight months, maintaining double-digit growth for four consecutive months.
Sector performance in Hong Kong diverged sharply. The top three O’Neil industry gainers were Bldg-Maintenance & Svc(G7340IG.HK), +22.62% WoW, Telecom-Infrastructure(G4895IG.HK), +14.91 %, and Comml Svcs-Staffing(G1011IG.HK), +9.45%. The high-dividend defensive profile of telecom infrastructure continued to attract capital under synchronized global tightening. Resource sectors—oil & gas, coal, and nonferrous metals—also outperformed as commodity prices rose. Banks and insurers were resilient, supported by capital injection policies for central financial enterprises and high-dividend logic. On the weak side, large-model concept stocks continued to correct, with AI names such as Zhipu down notably; biotech and consumer sectors also lagged. Copper-related names sold off broadly due to a stalled White House copper tariff plan and rising rate-hike expectations; Jiangxi Copper fell over 10%. Although LME copper had previously hit a record high above USD 14,858/ton, tariff-policy uncertainty pressured Hong Kong-listed copper producers.
In U.S. markets, all three major indices closed lower this week: Dow Jones Indus Actual(0DJIA) fell 2.53%, Nasdaq Composite(0NDQC) fell 1.6%, and S & P 500 Index(0S&P5)fell 1.64%.
The core driver was the overlap of three pressures: hotter-than-expected inflation, rising rate-hike expectations, and escalating geopolitical conflict. U.S. August PPI rose 5.4% YoY (above expectations), with core PPI at 4.6% YoY, indicating stronger-than-expected inflation stickiness at the production level and directly boosting Fed hike expectations. The U.S. 10-year yield approached 5%; Societe Generale warned that an upside break above 5.5% could severely hit equities. Escalating Middle East tensions and surging oil prices further intensified inflation concerns. Tech performance diverged: Apple launched its first foldable iPhone Duo and iPhone 18 Pro, with shares rising over 3% against the trend; semiconductor stocks such as NVIDIA and Intel declined on rate expectations, with Intel down more than 5% on Thursday. Trump pledged USD 5,000 payments to each U.S. adult after the midterm election (about USD 1.3 trillion in total) and said the Iran conflict would be ended immediately after the election, adding policy uncertainty and volatility. In AI, OpenAI launched a public beta of the Agents API; DeepSeek is preparing for a STAR Market IPO and cut V4.1 Flash model invocation pricing by as much as 60%; Qualcomm and Amazon are jointly developing AI data-center chips with procurement capped at USD 60 billion; Fitch warned U.S. equities could drop 35% if the AI bubble bursts.
A-shares traded in a volatile consolidation this week, with turnover moderating. CSI 300(000300)fell 0.83% WoW. Optical module names outperformed, with Zhongji Innolight up more than 10%. Later, market style rotated as funds moved out of high-valuation growth themes (such as AI compute) into high-dividend assets. By Wednesday, coal, nonferrous, shipping, power, and banking were broadly strong; multiple banks reached all-time highs.
Policy signals remained supportive. The “15th Five-Year Plan for Building a Financial Powerhouse” was officially released. The CSRC reiterated efforts to make A-shares the preferred listing venue for high-quality domestic firms, strictly enforce delisting rules, and broaden medium-to-long-term funding sources. Net medium-to-long-term fund inflows into A-shares exceeded RMB 600 billion year-to-date, and free-float holdings rose 12.5% versus end-2025. Eight central financial enterprises received RMB 360 billion of capital injections, significantly strengthening systemic risk resilience. On data, August CPI (+0.8% YoY) and PPI (+3.8% YoY) confirmed domestic-demand recovery; first-eight-month trade rose 17.6%, while August integrated-circuit exports doubled YoY. The information and communications “15th Five-Year Plan” set a 2030 intelligent-compute target of 9,800 EFLOPS. On tariffs, China’s Ministry of Commerce rejected U.S. accusations regarding “industrial-scale” distillation by Chinese AI firms, stating opposition to U.S. tech hegemony and compute monopolization.
The Top 33 portfolio was pressured this week, with an average decline of 3.11%; among 33 constituents, 9 rose and 24 fell. CSSC SHIPPING(03877) led gainers at +6.44%, with O’Neil Score 68, RS Rating 80, EPS Rating 90, and Industry Rating 71, benefiting from a favorable global shipping cycle. QINGDAO PORT(06198) rose 5.93%, with O’Neil Score 65, RS Rating 76, EPS Rating 70, Industry Rating 63, and revenue up 14.61% YoY. CKI HOLDINGS(01038) gained 3.11%, with O’Neil Score 73, RS Rating 85, EPS Rating 98, and Industry Rating 25 (in a preferred industry); low leverage (15.1%) and high ROE (18.25%) underscored its defensive profile. Since inception, the portfolio’s cumulative return has continued to outperform the Hang Seng Index (HSI), demonstrating relative resilience of selected quality assets in corrective markets.
The model portfolio declined 5.61% on average this week, with all three constituents down. MIDEA GROUP(00300) was the most resilient at -1.59%, with O’Neil Score 70, EPS Rating 92, RS Rating 83, and Industry Rating 42. BEONE MEDICINES(06160) fell 6.61%, with O’Neil Score 75, RS Rating 84, Industry Rating 39, and revenue up 29.63% YoY. INNOVENT BIO(01801) fell about 8.6%.
Technically, the HSI remains weak in the short term, trading below its 5-day, 10-day, 20-day, 50-day, and 200-day moving averages, signaling a softer medium-term trend. Key supports are 24,500 and 24,000, with strong support at the one-year low of 22,518.0. Key resistances are 25,000 and 25,500, with strong resistance near 26,000. HSTECH is in an even more severe setup, below all major moving averages: -2.05% vs 5-day, -3.52% vs 10-day, -5.55% vs 20-day, -7.74% vs 50-day, and -14.46% vs 200-day. It is down 35.66% from its one-year high and only 2.14% above its one-year low. Support is near 4,230 (one-year low), while resistance is near 4,500 and 4,700. In volume terms, HSI weekly turnover contracted vs last week (ratio ~0.83); last-day volume was 17.48% below its 50-day average. HSTECH last-day volume was 38.68% below its 50-day average, indicating a clear low-volume decline pattern.
Southbound funds posted sustained and significant net inflows this week, with cumulative net buying of about HKD 20.105 billion, sharply above the prior week’s HKD 7.363 billion, indicating firm mainland buying on the pullback. On Wednesday, Baidu saw a large HKD 1.7 billion southbound net inflow, becoming a key allocation target. Against synchronized global tightening and rising geopolitical risk, persistent southbound inflows provide important bottom support for Hong Kong equities, while the relative allocation appeal of yield assets (banks, utilities, telecoms—“bond-like substitutes”) has become more evident.
This week, global markets were driven by three themes: “escalating Middle East conflict and oil-price surge,” “synchronized global central-bank tightening,” and “soaring Fed hike expectations.” Hong Kong equities corrected notably under the combined pressure of rising U.S. yields, escalating geopolitical tension, and a tech pullback. Although HSTECH is close to its one-year low, substantial southbound net inflows indicate relatively strong bottom support. Looking ahead, market focus will center on U.S. August CPI and the Fed’s September meeting, developments in the Middle East and oil prices, implementation details and cadence of the “15th Five-Year Plan for Building a Financial Powerhouse,” and the impact of Apple’s new product pre-sales on the consumer-electronics supply chain.
This content is based on public data and market information analysis and does not constitute investment advice. Markets involve risk; investment requires caution.
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published on September 11, 2026