Hang Seng Index Rises 2.99%
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Hong Kong stocks extended their rebound this week, with the Hang Seng Index(HSI) rising 2.99% for the week. The Hang Seng TECH Index(HSTECH) surged 5.72%, significantly outperforming the broader market. The recovery in Hong Kong stocks this week was mainly driven by a marginal easing of external interest rate hike expectations, a drop in crude oil prices that alleviated inflation concerns, and a global tech stock rally at the beginning of the week that spurred valuation repairs in internet and growth stocks.
At the macro level, weakening US employment data for June provided marginal support for risk appetite in Hong Kong stocks. US ADP employment in June increased by only 98,000, below the expected 118,000 and the previous 122,000. June non-farm payrolls added 57,000, also significantly lower than the expected 110,000 and the previous 129,000, indicating that the job market is cooling. However, the US unemployment rate for June fell to 4.2%, better than the expected and previous 4.3%, and initial jobless claims for the week ending June 27 were 215,000, also slightly below expectations, suggesting that the labor market is slowing but has not stalled. This set of data alleviated market concerns about further short-term interest rate hikes by the Federal Reserve, but it was insufficient to support expectations of significant easing. Therefore, the positive impact on Hong Kong tech stocks is mostly reflected in a temporary relief of valuation pressure rather than a trend-based revaluation. Meanwhile, the US ISM Manufacturing PMI for June was 53.3, lower than the expected and previous 54, indicating a marginal slowdown in manufacturing sentiment and prompting the market to reassess the growth and interest rate trajectory.
Commodities and geopolitical developments have also improved the external environment for Hong Kong stocks. US EIA crude oil inventories fell by 3.775 million barrels for the week ending June 26, a smaller decline than expected and the previous value. Coupled with a phased easing of US-Iran relations, international oil prices generally weakened, with WTI briefly falling below $70 and Brent crude retreating to near pre-war levels. Lower oil prices help ease imported inflation pressures and reduce market concerns about prolonged high global interest rates. Meanwhile, the US dollar retreated following weak employment data, gold rebounded, and US Treasury yields fell to a relatively moderate range, creating a more favorable external environment for valuation repairs in Hong Kong stocks. However, the US AI hardware chain saw another sharp decline mid-week, and volatility in chip and computing power stocks intensified, indicating that global growth sector sentiment remains unstable. The rebound in Hong Kong tech stocks this week is largely a trading-driven repair.
Mainland policies and fundamentals continue to provide medium-term support. National Bureau of Statistics data showed that profits of industrial enterprises above designated size nationwide grew by 18.8% from January to May, and the June manufacturing PMI returned to the expansion zone, reflecting improvements in corporate earnings, production, and demand. On the policy front, the Political Bureau of the CPC Central Committee meeting released signals for stabilizing growth; eight departments issued implementation opinions on promoting the high-quality development of the industrial internet, and the State Council advanced AI education across all academic stages, continuing to strengthen policy support for AI, computing power, the industrial internet, and high-end manufacturing. These factors help stabilize medium-term expectations for Chinese tech, advanced manufacturing, and new economy sectors, but short-term market trends remain more influenced by external interest rate changes and global tech stock volatility.
Structurally, this week’s rebound in Hong Kong stocks is no longer just a repair of tech stocks; strong industry-level trends are increasingly concentrated in advanced manufacturing and medical sectors. According to the latest industry data, Machinery-Tools & Rel(G3541IG.HK) performed the strongest, with a weekly gain of 19.28% and an 8.10% increase on the last trading day. This reflects that, supported by policies on the industrial internet, high-end manufacturing, and equipment upgrades, capital attention on the advanced manufacturing chain has significantly heated up. Medical-Systems/Equip(G3831IG.HK) rose 16.20% for the week, showing outstanding elasticity in the medical equipment sector against the backdrop of improved policy expectations and growth-style repair. Medical-Diversified(G1005IG.HK) gained 14.55% for the week, with turnover reaching 4.249 billion on the last trading day. Capital absorption was the most evident among strong sectors, indicating that the pharmaceutical and medical sector has become one of the main themes driving this week’s Hong Kong stock rebound.
In the US market, the three major indices generally strengthened, but internal divergence continued. The Dow Jones Indus Actual(0DJIA) rose 1.97% for the week, just 0.01% away from its one-year high; the Nasdaq Composite(0NDQC) gained 2.12% for the week; and the S & P 500 Index(0S&P5) rose 1.76% for the week.
The core variables affecting US stocks remain employment, interest rates, and AI valuation repricing. Significantly weaker-than-expected non-farm and ADP data reduced market concerns about further short-term Fed rate hikes. The 2-year US Treasury yield fell to around 4.14%, and the 10-year yield was approximately 4.48%. The marginal relief in interest rate pressure is more favorable for sectors such as finance, consumer, and healthcare. However, the unemployment rate remains below expectations, and initial jobless claims stay at low levels, meaning the US economy has not significantly weakened, and the Fed’s policy path still faces reversals. Meanwhile, market doubts about AI investment returns have intensified. The semiconductor equipment, storage, and computing power chains have faced continuous selling, with stocks like Micron, AMD, and Arm seeing notable declines, indicating that capital is beginning to shift from high-valuation hardware chains to software, defensive sectors, and traditional blue chips. Falling oil prices, a retreating US dollar, and rebounding gold have further reinforced the trading logic of “slowing growth but temporarily easing inflation pressures.”
For A-shares, the CSI 300(000300) fell 0.54% for the week, underperforming both Hong Kong and US stocks. Trading volume on the last trading day was 7.04% higher than the 50-day average volume, indicating that trading remained active during the adjustment. At the sector level, previously strong AI hardware, semiconductors, and sci-tech growth saw significant pullbacks, while large-cap financials and some policy-benefited sectors showed relative resilience, with market style switching rapidly.
The macro and policy environment behind A-shares is generally neutral to positive. The June manufacturing PMI returned to the expansion zone, indicating a phased recovery in economic momentum. Industrial enterprise profits grew by 18.8% from January to May, supporting earnings expectations. On the policy front, the Political Bureau meeting and the implementation opinions on the high-quality development of the industrial internet continue to strengthen the main themes of new quality productive forces, computing power infrastructure, and advanced manufacturing. The State Council’s promotion of AI education also helps consolidate long-term expectations for technological innovation. Meanwhile, the margin trading balance remains at a high level, indicating that market risk appetite persists, but active leverage funds have also amplified volatility in popular sectors. Externally, the Fed’s interest rate path, cooling global AI trading, and issues regarding tariffs and supply chain security will continue to transmit to A-shares through exchange rates, export expectations, and risk appetite.
In terms of portfolio performance, the HK33 had an average weekly gain of 0.67%, underperforming the Hang Seng Index (HSI) but outperforming many high-volatility growth sectors, reflecting a more balanced performance of the selected stock pool during the rebound. Among them, MODERN DENTAL(03600) rose 12.48% for the week. The Model Portfolio had an average weekly change of -0.73%, with its sole constituent stock CATL(03750) falling 0.73% for the week. However, its revenue still grew 52.45% year-on-year, with an RS Rating of 87 and an O’Neil Score of 67. Its stock price remains 87.63% above its 52-week low, indicating that the foundation for medium-term strength remains intact, with only a slight pullback in the short term due to overall growth stock volatility and shrinking volume.
Technically, although Hong Kong stocks rebounded this week, they remain overall in a recovery phase. The Hang Seng Index(HSI) has reclaimed its 5-day and 10-day moving averages but remains below its 20-day, 50-day, and 200-day moving averages. The Hang Seng TECH Index(HSTECH) has similarly reclaimed its 5-day and 10-day moving averages but remains below its 20-day, 50-day, and 200-day moving averages. This means that a short-term oversold rebound has unfolded, but the medium-term trend has not yet reversed. In terms of support, the previous low of around 22518 for the Hang Seng Index (HSI) remains a key level, while the low of around 4229.94 for the Hang Seng TECH Index (HSTECH) warrants attention. On the resistance side, the Hang Seng Index first needs to reclaim its 20-day moving average before it is expected to further challenge the 50-day moving average zone.
Regarding southbound capital, there was a net inflow of approximately -1.88 billion HKD this week, representing a slight net outflow. This indicates that during the Hong Kong stock rebound, mainland funds remained generally cautious and did not form a clear trend of chasing higher prices. This aligns with the characteristics of index repair but insufficient volume, also indicating that the current market is more about sentiment repair rather than a trend-driven rally led by incremental capital. If external interest rate expectations ease further and tech stock volatility converges in the future, and southbound capital turns to net inflows again, the sustainability of the Hong Kong stock rebound is expected to strengthen.
This week, global markets repeatedly priced in US employment cooling, easing rate hike expectations, falling oil prices, and divergent AI trading. Hong Kong stocks saw a repair after a previous significant adjustment, with the tech sector outperforming the broader market, but the medium-term trend remains to be confirmed. Going forward, the market still needs to focus on US employment and interest rate trajectories, the impact of US-Iran tensions on oil prices, and the earnings realization of the AI hardware chain. Reminder: The above content is compiled solely based on the provided data and does not constitute any investment advice. Markets carry risks, and investment requires caution.
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published on July 3, 2026