Hang Seng Index Up 0.82%
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The Hang Seng Index(HSI) rose 0.82% this week, while the Hang Seng TECH Index(HSTECH) declined by 1.41%. The Hong Kong market showed significant divergence: traditional economy sectors strengthened under supportive policies and inflows from southbound capital, whereas tech and internet stocks were weighed down by volatility in overseas tech equities and profit-taking pressures. On the final trading day, HSI volume surged +19.34% above its 50-day average, signaling a notable rebound in market liquidity and participation.
The key drivers behind Hong Kong’s performance this week stemmed from positive shifts in both domestic and external policy environments. Externally, the U.S. Supreme Court ruled that the Trump administration’s large-scale tariffs—imposed under the International Emergency Economic Powers Act (IEEPA)—were unlawful, raising hopes for eased U.S.-China trade tensions. Although the White House is exploring alternative legal avenues to maintain tariffs, this judicial decision has temporarily alleviated market fears of an all-out trade war escalation. Domestically, China’s macro policy stance remains proactive. On February 25, the People’s Bank of China conducted a CNY 600 billion Medium-term Lending Facility (MLF) operation (net injection of CNY 300 billion), marking the 12th consecutive month of expanded rollovers to ensure ample post-holiday liquidity. Additionally, Shanghai unveiled the “Shanghai Seven Measures,” significantly lowering home-purchase barriers for non-local residents and increasing housing provident fund loan limits—sending a clear signal to stabilize the property market. For Hong Kong specifically, the PBOC introduced new rules supporting onshore banks’ standardized cross-border RMB interbank financing and implemented countercyclical adjustment mechanisms. This not only reinforces Hong Kong’s role as the premier offshore RMB hub but also provides a more stable liquidity backdrop. Furthermore, the RMB exchange rate strengthened notably, with the offshore RMB breaking through the 6.83 level—the strongest in nearly three years—directly enhancing the appeal of HKD-denominated Hong Kong equities to foreign investors.
Sector-wise divergence was evident, with cyclical and high-end manufacturing segments leading gains. CHONGQING M&E(02722) surged 23.08% for the week, becoming the top performer in the Top 33 portfolio, supported by an EPS Rating of 99 and an RS Rating of 94, reflecting its deep positioning in power equipment and general machinery. Similarly, GANFENGLITHIUM(01772) gained 12.23%, indicating market recognition of the upstream resource reflation thesis. In contrast, HSTECH constituents broadly underperformed; large-model AI concept stocks like Zhipu AI plunged over 20% in a single week, highlighting a market-driven risk reassessment of high-valuation, unprofitable AI narrative plays.
U.S. markets remained broadly stable this week but exhibited sharp internal divergence. The Dow Jones Indus Actual(0DJIA) edged down 0.26%, the S & P 500 Index(0S&P5) was nearly flat (-0.01%), and the Nasdaq Composite(0NDQC) dipped slightly by 0.03%.
Market attention was entirely focused on NVIDIA’s earnings report. Despite Q4 revenue of USD 68.1 billion (+73% YoY)—far exceeding expectations—its stock turned sharply negative in after-hours trading and ultimately dropped nearly 5.5% the following day, dragging down the entire AI and semiconductor sector. This reflects deep-seated investor concerns about whether massive AI investments can be sustainably converted into profits. On the macro front, initial jobless claims fell to 212,000—below expectations—confirming continued labor market resilience. However, the U.S. government is now planning to impose new global tariffs under the Trade Act of 1974, targeting six strategic sectors including batteries and power grids with so-called “national security tariffs,” introducing fresh uncertainty into future U.S.-China economic relations. Meanwhile, reports of “significant progress” in indirect U.S.-Iran negotiations provided support to energy markets.
The A-share market delivered a strong performance this week, achieving a bullish “Year of the Horse” opening. The CSI 300(000300) rose 1.08%, with trading volume on the last day up +9.25% versus the 50-day average, indicating active participation by incremental capital.
Market leadership shifted from pre-holiday AI application themes toward a dual engine of “price-increase logic” and “hard tech.” Cyclical sectors—including chemicals, nonferrous metals, and steel—surged collectively, directly benefiting from rising expectations for upstream raw material prices. Simultaneously, NVIDIA’s earnings beat catalyzed a rebound in the computing hardware supply chain (e.g., CPO, PCB). Policy support was the primary catalyst: beyond the PBOC’s large MLF net injection, local easing measures like Shanghai’s “Seven Measures” effectively stabilized sentiment. Strong Spring Festival consumption data—total spending reached a record-high CNY 803.4 billion—also provided solid evidence of domestic demand recovery, boosting investor confidence in the economic fundamentals.
This week, the Top 33 portfolio delivered strong results, gaining an average of +2.97%, with 18 stocks rising and 15 declining. CHONGQING M&E(02722) led with a 23.08% weekly gain. The Model Portfolio, however, edged down slightly by -0.14% (5 up, 8 down), with GANFENGLITHIUM(01772) topping its constituents at +12.23%. Since inception, the Top 33 has consistently outperformed the Hang Seng Index (HSI), reaffirming the effectiveness of a strategy focused on high industry strength and quality fundamentals in structural markets.
Technically, the HSI is now firmly above its 50-day moving average (+0.4082%) and sits 4.3171% above its 200-day moving average, maintaining a medium-term bullish bias. Key near-term support lies at the 26,000 psychological level, with resistance ahead at 27,000. In contrast, the HSTECH remains notably weak—trading 7.712% below its 50-day MA and already breaking below its 200-day MA (-8.7696%). Failure to quickly reclaim the 50-day line could trigger further downside toward the 5,000 support level.
Southbound capital recorded a net inflow of HKD 6.705 billion this week, reversing the prior week’s significant outflow. Flow patterns indicate investors are selectively accumulating high-quality blue chips and high-momentum cyclical stocks during market pullbacks, providing crucial bottom-up support to the Hong Kong market.
In summary, global markets navigated a complex interplay of policy maneuvering and earnings validation this week. U.S. equities wobbled amid AI-related anxieties triggered by NVIDIA’s results; A-shares extended their spring rally on robust policy and data support; and Hong Kong equities demonstrated resilience, buoyed by RMB appreciation, optimized local financial policies, and returning southbound flows. Looking ahead, with China’s National “Two Sessions” approaching, more detailed policies on “new quality productive forces” and growth stabilization are expected. Coupled with the upcoming Fed rate decision in March, Hong Kong—as a critical platform for both domestic and international capital allocation into China’s core assets—may increasingly exhibit a valuation discount advantage. Investment involves risks; please invest prudently.
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published on February 27, 2026