Hang Seng Rose 1.3%
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This week, the Hong Kong market saw an early rally followed by a pullback. The Hang Seng Index(HSI) gained 1.3%, while the Hang Seng Tech Index(HSTECH) slipped 0.4%.
At the start of the week, improving U.S.–China relations and supportive policies from the General Administration of Customs and the Ministry of Commerce helped lift the market. The rally extended as optimism toward AI and other emerging technologies, coupled with rising prices of commodities such as gold and lithium battery materials, continued to drive the market higher, with the HSI briefly breaking above the 27,000 level. However, a sharp selloff in U.S. equities on Friday significantly dampened global risk appetite, placing direct pressure on Hong Kong stocks.
Sector performance showed clear divergence. Sectors benefiting from product price increases or favorable industry developments—such as lithium batteries, innovative pharmaceuticals, gold, and paper manufacturing—posted strong gains throughout the week. In contrast, oil and coal stocks, which are closely tied to international crude prices, underperformed amid declining energy prices, while major tech stocks delivered mixed performance.
In the U.S. stock market, as of this Thursday, the three major indexes first climbed and then pulled back. The S & P 500 Index(0S&P5) inched up 0.1%, the Nasdaq Composite(0NDQC) fell 0.6%, and the Dow Jones Indus Actual(0DJIA) rose 1.0%.
After a 43-day government shutdown, the U.S. House of Representatives approved the temporary federal funding bill previously passed by the Senate, marking a decisive step toward ending the longest shutdown in U.S. history. Once the shutdown is lifted, the government will face a lengthy restart process, which may take several days or even more than a week to fully resume normal operations. The Congressional Budget Office estimates that the six-week shutdown will reduce fourth-quarter GDP by 1.5 percentage points, resulting in a net economic loss of roughly USD 11 billion.
On the policy front, the United States formally announced a one-year suspension of the Section 301 measures targeting China’s shipbuilding and other industries. Senior U.S. officials also indicated that the U.S. has reached trade agreements with several Latin American countries, including tariff reductions on certain coffee and fruit export products.
On employment, ADP data shows that in the four weeks ending October 25, the U.S. private sector cut an average of 11,250 jobs every two weeks. In total, the month saw a reduction of 45,000 private-sector jobs (excluding government employees), marking the largest monthly decline since March 2023.
On interest rates, the CME FedWatch Tool shows that as of November 13, the probability of a 25-basis-point rate cut in December fell to 50.7% from 69.6% a week earlier, continuing its multi-week decline and indicating growing market disagreement over whether the Fed will proceed with another cut in December.
In the A-shares market, the broader market saw choppy consolidation this week, with the CSI 300(000300) down 1.1% for the week. In terms of trading activity, turnover softened compared with last week, with daily turnover during all five sessions remaining below the 50-day average. Total turnover for the Shanghai and Shenzhen markets hovered around RMB 2 trillion per day. By sector, the market saw rapid rotations, with funds frequently shifting between defensive and cyclical themes. Lithium battery electrolyte names, cross-strait integration plays, and SPD-related sectors were among the more active areas.
On the macro front, data from the National Bureau of Statistics showed that in October, policies aimed at expanding domestic demand continued to deliver results. Supported by the National Day and Mid-Autumn holidays, CPI rose 0.2% y/y and 0.2% m/m. Core CPI climbed 1.2% y/y, marking the sixth consecutive month of acceleration. PPI fell 2.1% y/y, narrowing by 0.2 percentage point from the previous month and registering a narrowing decline for a third straight month. On a m/m basis, PPI rose 0.1%, turning positive for the first time this year after being flat in September.
On trade, data from the General Administration of Customs showed that in October, China’s total goods trade reached RMB 3.7 trillion, up 0.1% y/y and marking the ninth consecutive month of positive growth. Exports totaled RMB 2.17 trillion, down 0.8% y/y, while imports rose 1.4% y/y to RMB 1.53 trillion, extending gains for a fifth straight month. Over the first ten months, trade with the U.S.—China’s third-largest trading partner—fell 15.9% y/y, accounting for 9% of total trade. Rare earth exports reached 4,343.5 tons in October, up 9% m/m and rebounding after three consecutive monthly declines. Soybean imports came in at 9.482 million tons, hitting a record high for the month.
On foreign exchange and gold reserves, data from the State Administration of Foreign Exchange showed that as of end-October, China’s FX reserves stood at USD 3.343 trillion, up USD 4.685 billion from end-September, marking a third straight month of gains and hitting the highest level since December 2015. Gold reserves reached 74.09 million ounces, an increase of 300,000 ounces from the previous month, marking the twelfth consecutive month of accumulation. However, the monthly increase was the smallest since China resumed gold purchases in November 2024.
On financial data, the People’s Bank of China reported that total social financing (TSF) reached RMB 30.9 trillion in the first ten months of 2025, up RMB 3.83 trillion y/y. TSF increased by RMB 810 billion in October. At end-October, outstanding TSF stood at RMB 437.72 trillion, up 8.5% y/y. Broad money (M2) reached RMB 335.13 trillion, up 8.2% y/y; narrow money (M1) rose 6.2% y/y to RMB 112 trillion; and currency in circulation (M0) rose 10.6% y/y to RMB 13.55 trillion. The M2–M1 gap widened to 2.0 percentage points in October from 1.2 percentage points in September.
On policy, the Ministry of Commerce and the General Administration of Customs announced that, effective immediately through November 10, 2026, China will suspend export control measures covering superhard materials, certain rare-earth equipment and raw materials, lithium batteries and anode materials, as well as medium- and heavy-rare-earth products and related technologies. China will also reinstate export licenses for three U.S. companies shipping soybeans to China, resume U.S. log imports, suspend special port fees for U.S. vessels for one year, and suspend countermeasures against five U.S. subsidiaries of South Korea’s Hanwha Ocean for one year. In addition, the U.S., Mexico, and Canada have been added to the list of countries subject to controlled precursor chemical exports, with 13 specific chemicals listed separately for the three countries.
Leading stocks declined this week. The average stock in the MarketSmith Hong Kong 33 rose by 0.5% for this week. Our Hong Kong Model Portfolio fell by 0.1% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 1027.8% vs. a 30.2% up for the Hang Seng.
The best performer in our Hong Kong 33 was CIRC(01763), it’s a Chinese enterprise specializing in the research and development, production, and sales of radioactive drugs, medical and industrial radioactive source products. The stock gained 14.3% this week. EPS rating stands at 95, RS rating of 91, and A/D rating of A+.
Our Hong Kong Market Status are in an Uptrend Under Pressure.
From a technical perspective, the Hang Seng Index(HSI) showed an early-week rally followed by a pullback. The index rose for four consecutive sessions and broke above the 27,000 level on Thursday, but failed to sustain the momentum, falling 1.9% on Friday to close at 26,572.46. Trading volume remained subdued throughout the week, with turnover on all five trading days staying below the 50-day average, indicating a cautious market tone. On the technical front, the 50-DMA serves as a key near-term support, while the YTD high of 27,381.84 recorded on October 2 remains a major resistance level.
The Southbound inflow via the HK-China Stock Connect totaled HK$24.773 billion for the week, slightly lower than the previous week but marking the 26th consecutive week of net inflows. YTD, the Southbound inflow via the HK-China Stock Connect has continued to set new annual highs, with cumulative net purchases now exceeding HK$5 trillion, underscoring mainland investors’ long-term confidence in Hong Kong equities.
Overall, Hong Kong stocks attempted to push higher this week on the back of supportive policies and strength in commodity-linked themes, but external market shocks and weak turnover ultimately resulted in a rally-and-reversal pattern with notable sector divergence. In the near term, market direction will likely remain influenced by U.S. market sentiment and fluctuations in commodity prices. Whether the HSI can regain upward momentum hinges on two key signals: first, whether turnover can meaningfully pick up to resolve the current volume–price divergence; and second, whether Southbound inflows can continue to provide a stable source of liquidity. Until the index breaks out of its current consolidation range, the market is expected to remain driven by structural opportunities rather than broad-based moves.
At this stage, investors are advised to stay disciplined and avoid chasing strength. Priority should be given to stocks with earnings that exceed expectations and with constructive technical setups, allowing for a more resilient approach amid ongoing 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 November 14, 2025