Hang Seng fell 1.0%
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This week, the Hong Kong stock market exhibited a pattern of initial weakness followed by a rebound, with the Hang Seng Index(HSI) down 1.0% and the Hang Seng Tech Index(HSTECH) up 0.5%. In the first half of the week, the HSI fell below the 25,000-point mark, pressured by a pullback in tech stocks and high volatility in the resources sector. In the afternoon of Thursday, a V-shaped reversal occurred, and the rebound continued on Friday, supported by a strong rally in gold stocks and stabilization in tech shares, which helped recoup part of the earlier losses. Key drivers included gold sector earnings exceeding expectations, a temporary recovery in tech sentiment, and a structurally differentiated capital flow. In addition, dovish signals from the Federal Reserve combined with domestic growth-stabilizing policy expectations created mixed views on the short-term trajectory of the Hong Kong market. Market sentiment remained volatile, with intense bull-bear competition and increasing sectoral divergence.
In the U.S. equity market, as of this Thursday, U.S. equities exhibited a volatile pattern, initially pressured by cautious earnings expectations and tariff concerns, with all three major indices closing lower earlier in the week. Sentiment gradually recovered following Nvidia’s earnings release and a rebound in tech stocks. On Thursday, the S & P 500 Index(0S&P5) set an intraday record high and closed above the 6,500-point mark, bringing its four-day cumulative gain to 0.54%. The Nasdaq Composite(0NDQC) rose 0.97%, while the Dow Jones Indus Actual(0DJIA) edged up 0.01%.
On the macro front, data from the Bureau of Economic Analysis showed that U.S. Q2 real GDP annualized q/q growth was revised up to 3.3%, beating both expectations and the prior estimate. The key driver of the revision was business investment, which was sharply raised from 1.9% in the advance estimate to 5.7%, reflecting stronger spending on software and transportation equipment. Net exports contributed nearly five percentage points to GDP, the highest on record. Consumer spending was revised upward, with the annualized growth rate raised from 1.4% to 1.6%, lifting its contribution to GDP from 0.98 percentage points to 1.07 percentage points and underscoring resilient demand. The Q2 core PCE price index was revised to 2.5% annualized q/q, unchanged from both expectations and the prior estimate. Separately, Commerce Department data showed that July durable goods orders fell 2.8% m/m in the preliminary reading, better than both consensus and the prior figure, though y/y growth slowed to 3.5%. The monthly swings were largely attributable to volatility in Boeing orders and the unwinding of the “front-loading” effect spurred by earlier tariff policy. Ex-transportation, durable goods orders rose 3.8% y/y, the fastest pace since November 2022. Core capital goods orders (excluding aircraft and defense) rebounded 1.06% after a revised 0.6% decline in June, marking the fourth consecutive monthly gain. This strength suggests that underlying corporate demand for equipment and expansion remains firm, tempering concerns of an imminent economic slowdown.
In policy developments, the U.S. Department of the Interior’s Geological Survey proposed adding six new critical minerals—copper, potash, silicon, silver, lead, and rhenium—to its strategic list, citing their importance for economic growth and national security. The draft has been published in the Federal Register and will be open to public comment for 30 days.
On the labor front, Department of Labor data showed that initial jobless claims for the week ending August 23 fell by more than 5,000 to 229,000, slightly below expectations and suggesting employers are choosing to retain workers despite heightened economic uncertainty. Continuing claims for the week ending August 16 came in at 1.954 million, lower than both consensus and the prior reading. While often viewed as an indicator of re-employment speed, the figure remains relatively elevated, highlighting the challenges job seekers face in securing new positions.
Against this backdrop, the labor data add to signs of a cooling job market. Speaking at Jackson Hole, Fed Chair Jerome Powell warned of rising downside risks to employment, hinting at possible policy easing. According to the CME FedWatch tool, as of August 28, markets now price an 85.2% chance of a 25bp rate cut in September, little changed from last week, with additional cuts in October and December each carrying roughly 40% odds.
A-shares market saw the CSI 300(000300) maintain its upward momentum this week, rising a cumulative 2.7% and successfully surpassing the 2024 high to set a new year-to-date peak. Weekly trading volume continued to expand, with average daily turnover exceeding the 50-day moving average on all five trading days. Notably, the combined daily turnover of the Shanghai and Shenzhen markets on Monday and Wednesday each exceeded RMB 3.1 trillion, approaching the historical single-day record of RMB 3.48 trillion set on October 8, 2024. The market is currently in an uptrend, with the 21-day moving average providing key short-term support and upside resistance concentrated around the July 2022 high of 4,530.32 points. The CPO sector led gains, supported by favorable policy measures.
On the macro front, data from the National Bureau of Statistics showed that profits of large-scale industrial enterprises nationwide totaled RMB 4,020.35 billion from January to July, down 1.7% y/y, with the decline narrowing 0.1 ppt compared to the first half of the year. In July alone, profits of large-scale industrial enterprises fell 1.5% y/y, narrowing 2.8 ppt from June and marking the second consecutive month of improvement. Manufacturing profits grew relatively faster, providing important support for the recovery of profits in large-scale industrial enterprises.
On the policy front, the Ministry of Industry and Information Technology (MIIT) and two other ministries jointly released the “Interim Measures for Total Quantity Control of Rare Earth Mining and Rare Earth Smelting Separation,” aiming to strengthen national management of rare earths as a strategic resource, ensure their effective protection and rational development, and promote high-quality development of the rare earth industry. In addition, the State Council issued the “Opinions on Deepening the Implementation of the ‘AI+’ Action,” setting targets for a penetration rate of over 70% for next-generation intelligent terminals and AI agents by 2027, and over 90% by 2030. Simultaneously, MIIT issued the “Guiding Opinions on Optimizing Business Access to Promote the Development of the Satellite Communication Industry,” aiming for a fully improved regulatory framework and policies by 2030, large-scale adoption of new models such as direct-to-mobile satellite connectivity, and a satellite communication user base exceeding ten million. Separately, the personal consumption loan interest subsidy policy will officially take effect on September 1. This marks the first time the central government introduces an interest subsidy in the personal consumption loan sector, focusing on providing targeted support for the portion of loans actually used for consumption.
Leading stocks advanced this week. The average stock in the MarketSmith Hong Kong 33 rose by 0.4% for this week. Our Hong Kong Model Portfolio rose by 3.3% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 995.1% vs. a 22.9% up for the Hang Seng.
The best performer in our Hong Kong 33 was CHINAGOLDINTL(02099), it’s a Canada-based gold and base metals mining company. The stock gained 28.9% this week. EPS rating stands at 85, RS rating of 93, and A/D rating of A+.
Our Hong Kong Market Status are in a Confirmed Uptrend.
From a technical perspective, the HSI surged on Monday to a new high not seen since November 2021, followed by a period of consolidation, breaking through the 21-day moving average and the 25,000-point mark before ultimately finding support at the 50-day moving average and stabilizing above 25,000 points. In terms of volume, weekly turnover expanded significantly compared with the previous week, with the average daily volume for all five trading days above the 50-day moving average. On the support side, the 50-day moving average serves as a key short-term support level; on the resistance side, the key obstacle is concentrated around the 26,000-point mark.
On the capital flow front, the Southbound inflow via the HK-China Stock Connect maintained strong net inflows this week, totaling HKD 22.172 billion, marking the 15th consecutive week of net inflows. Year-to-date, the cumulative net inflow has reached HKD 978.998 billion.
Overall, the Hong Kong market experienced a temporary adjustment this week due to tech stock pullbacks and resource sector volatility. However, the strong performance of the gold sector and the tech sector’s bottoming rebound added resilience to the market. The HSI found key support at the 50-day moving average, limiting short-term downside, while the 26,000-point level remains the focal point of intense bull-bear contention. As expectations of a shift in U.S. monetary policy rise and domestic growth-stabilizing measures gradually take effect, market risk appetite may recover, though investors should remain vigilant against uncertainties arising from escalated geopolitical tensions and changes in the global economic recovery pace.
At this stage, investors are advised to remain calm and rational, avoid blindly chasing gains, and prioritize stocks with earnings exceeding expectations and stable technical patterns, employing a prudent strategy to navigate market volatility.
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Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.
published on August 29, 2025