Hang Seng Rose 1.4%
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This week, the Hong Kong stock market overall exhibited a volatile upward trend, initially rising, then falling before rebounding, with the Hang Seng Index(HSI) up 1.4% and the Hang Seng Tech Index(HSTECH) up 0.2%.
On Monday, the HSI surged 2.2% on a gap-up, boosted by positive catalysts including consensus reached at the SCO Summit, growth in Alibaba’s cloud business along with its AI chip launch, SMIC acquiring minority stakes, and the U.S. removal of certain companies from the export authorization list accelerating domestic substitution. Subsequently, concerns over global growth triggered by the U.S. August ADP employment data falling well below expectations and the Bank of Canada’s rate cut led to three consecutive days of consolidation. On Friday, the HSI closed higher as expectations of a Fed rate cut intensified and strong AI demand from Broadcom drove a rebound in AI and lithium battery stocks.
Overall, market sentiment swung between optimism, caution, and renewed optimism, while capital flows adjusted in response to policy catalysts and macro volatility, resulting in an intraday volatile upward pattern for the week.
In the U.S. equity market, trading was closed on Monday due to the Labor Day holiday. As of Thursday, U.S. equities fluctuated but trended higher. The S & P 500 Index(0S&P5) rose 0.7%, the Nasdaq Composite(0NDQC) gained 1.2%, and the Dow Jones Indus Actual(0DJIA) edged up 0.2%, with all three indices approaching record highs.
On the macro front, data from the Bureau of Economic Analysis showed that the July PCE Price Index rose 2.6% y/y, in line with both expectations and the prior reading; it increased 0.2% m/m, matching expectations but easing from the previous pace. The Core PCE Price Index rose 2.9% y/y, in line with expectations and up from the prior reading, marking the highest level since February; it gained 0.3% m/m, in line with both expectations and the prior reading. The rebound in inflation was primarily driven by higher service costs. Meanwhile, ISM data showed the U.S. Manufacturing PMI came in at 48.7 in August, below expectations but above the prior reading, marking the sixth consecutive month below the expansion threshold, mainly due to declining output, underscoring persistent weakness in manufacturing. A positive signal, however, was that the new orders index expanded for the first time this year, while the prices index dropped to its lowest level since February—its second consecutive decline following a sharp 4.9-point drop in July—indicating that tariff-induced price volatility is easing. The August Services PMI stood at 52, below both expectations and the prior reading, largely supported by the strongest order growth in nearly a year. In addition, data from the U.S. Treasury showed that as of August 29, monthly tariff revenues reached $31.37 billion, a record high for a single month, with fiscal year-to-date revenues totaling $183.56 billion.
On the labor market, data from the Bureau of Labor Statistics showed that July JOLTS job openings stood at 7.181 million, marking only the second time since late 2020 that the figure fell below 7.2 million, and the lowest since September 2024—a rare post-pandemic low, below expectations. The prior reading was revised down from 7.437 million to 7.36 million. For the week ending August 30, initial jobless claims reached 237,000, the highest since June, above both expectations and the prior reading. However, continuing claims stood at 1.94 million, below both expectations and the prior reading. ADP Research reported that private payrolls increased by 54,000 in August, sharply missing expectations and slowing significantly from the revised 104,000 increase in July. The Challenger Job Cut Report showed that U.S. companies added only 1,494 new positions in August, the lowest for the month since records began in 2009; meanwhile, announced layoffs surged 13% y/y to nearly 85,980 and rose 39% m/m, the highest August
On interest rates, signs of weakening labor market demand reinforced market expectations for a Fed rate cut this month. According to the CME FedWatch Tool, as of September 4, the probability of a 25-basis-point rate cut in September stood at 99.3%, while the probabilities of 25-basis-point cuts in both October and December were each around 50%.
In the A-shares market, the CSI 300(000300) exhibited a volatile pattern this week, initially weakening, then falling further before ultimately rebounding, resulting in a cumulative decline of 0.8%. Despite the pullback, the index still surpassed the high reached on July 8, 2022, setting a new high for the year. Market turnover remained active, with weekly trading volume slightly lower than the previous week, yet the five-day average daily volume stayed above the 50-day moving average. The market remains in an uptrend, with the 21-DMA providing key short-term support, while resistance is concentrated near Tuesday’s high at 4,548.89 points.
On the macro front, data from the National Bureau of Statistics (NBS) showed that China’s official manufacturing PMI came in at 49.4 in August, up 0.1ppt from the prior month, reflecting a modest improvement in manufacturing activity. Both production and demand indices rose, while overall prices continued to improve, with the input price index and ex-factory price index climbing for a third consecutive month. The non-manufacturing PMI registered 50.3, up 0.2ppt from the previous month and remaining above the 50 threshold, indicating continued expansion. The composite PMI stood at 50.5, up 0.3ppt m/m, also staying above the threshold, suggesting that overall business activity among Chinese enterprises expanded at a faster pace. By industry, expectations for production and business activity in sectors such as general equipment, railway, shipbuilding, and aerospace equipment all remained above 58.0, signaling robust sentiment. Meanwhile, RatingDog data showed that China’s August RatingDog Manufacturing PMI (formerly Caixin Manufacturing PMI) rose to 50.5, beating both expectations and the prior reading. The pace of improvement in manufacturing activity was the strongest in five months, with the contraction in new export orders moderating compared to July, leading manufacturers to raise both purchasing volumes and inventories. Inventories of raw materials and semi-finished goods posted the largest increase since November 2020. On the pricing front, average input costs rose for a second straight month in August, with the rate of increase the highest since November 2024. The RatingDog Services PMI (formerly Caixin Services PMI) came in at 53, above expectations and the prior reading, marking the fastest pace since May 2024 and extending its expansion streak to 32 consecutive months. Growth in new orders accelerated for the second month in a row, also reaching the fastest pace since May 2024, while new export orders grew at the quickest pace since February. The RatingDog Composite PMI (formerly Caixin Composite PMI) printed at 51.9, higher than the prior reading.
On the policy side, the Ministry of Industry and Information Technology (MIIT) and another government agency jointly issued the “2025–2026 Action Plan for Stabilizing Growth in the Electronic Information Manufacturing Industry.” The plan sets targets including: maintaining an average annual growth rate of around 7% in the added value of large-scale computer, communications, and other electronic equipment manufacturing; achieving an industry-wide average annual revenue growth of over 5%; ensuring that by 2026, revenue and exports in this industry remain the highest among the 41 major industrial categories; five provinces each reaching industry revenues exceeding RMB 1 trillion; the server industry surpassing RMB 400 billion in scale; the domestic penetration rate of color TVs with screen sizes of 75 inches or larger exceeding 40%; and driving personal computers and smartphones toward greater intelligence and higher-end development. In addition, the Ministry of Commerce ruled that, starting from September 4, 2
Leading stocks advanced this week. The average stock in the MarketSmith Hong Kong 33 rose by 0.7% for this week. Our Hong Kong Model Portfolio rose by 2.8% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 1002.9% vs. a 24.6% up for the Hang Seng.
The best performer in our Hong Kong 33 was DRAGON MINING(01712), it’s a mature gold producer headquartered in Australia, engaged in gold exploration, mining, and processing in Finland and Sweden. The stock gained 18.8% this week. EPS rating stands at 91, RS rating of 95, and A/D rating of B+.
Our Hong Kong Market Status are in a Confirmed Uptrend.
From a technical perspective, after the Hang Seng Index surged on Monday with a strong gap-up creating a price gap, it experienced three consecutive days of intraday consolidation but did not break below the 25,000-point level, keeping the bullish structure intact. On Friday, the index rebounded, recovering most of the week’s losses and closing above the 5-day and 21-day moving averages. The 5-day, 21-day, 50-day, and 200-day key moving averages maintained a bullish alignment, preserving the trend’s integrity. In terms of volume, weekly turnover slightly declined from the previous week, with Wednesday’s single-day volume falling below the 50-day average, indicating reduced participation during the short-term pullback. On the support front, the 21-day moving average served as a key short-term defense, while the main resistance was concentrated near last week’s high of 25,918.86 points.
On the capital front, the Southbound inflow via the HK-China Stock Connect continued to show strong net inflows this week, totaling HKD 33.06 billion, a significant increase from last week, and marking the 16th consecutive week of net inflows.
Overall, under the triple drivers of “policy support + macro volatility + capital resonance,” the Hong Kong market achieved a volatile upward trend this week, maintaining its overall uptrend. However, caution is warranted regarding potential market swings triggered by fluctuating U.S. employment data, geopolitical tensions impacting energy prices, and profit-taking pressure in certain high-valuation tech stocks.
At this stage, investors are advised to remain calm and rational, avoid chasing prices blindly, and prioritize stocks with earnings exceeding expectations and stable technical patterns, employing a prudent strategy to navigate market fluctuations.
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published on September 5, 2025