HSI rose 3.55%
Editor’s Note: As always, we would appreciate any feedback you have. It will help us make this app more useful to you.
Hong Kong equities were broadly strong this week, with the Hang Seng Index(HSI)up 3.55% and the Hang Seng TECH Index(HSTECH) up 1.24%. In terms of weekly rhythm, the market showed a volatile upward pattern: HSI rose at the beginning of the week, consolidated for several sessions, and regained strength into the weekend. Domestically, pro-growth policies continued to send positive signals—including Shanghai’s new property measures and new policy-based financial instruments—supporting market risk appetite. At the same time, notable southbound inflows early in the week also helped the index. However, escalating U.S.-Iran geopolitical risk, rising international oil prices, and a hawkish tone in the Fed’s July meeting minutes put some pressure on Hong Kong valuations and risk appetite for tech stocks.
Domestic macro data still reflected a divergent economic picture. China’s total electricity consumption in July rose 1.7% YoY, below the previous 3.7%, indicating persistent demand pressure. Meanwhile, July value-added industrial output of above-scale enterprises grew 4.5% YoY; the contribution rate of new growth drivers reached 50.9%; and the decline in property prices continued to narrow, suggesting the overall economy remained stable. On the policy side, support for growth continued to strengthen: as of August 21, the 1-year LPR was 3.0% and the over-5-year LPR was 3.5%, unchanged for 15 consecutive months; the scale of new policy-based financial instruments reached RMB 800 billion, focusing on private investment and industrial projects; and Shanghai further lowered down-payment ratios for some homes and introduced a trade-in subsidy of up to RMB 80,000. These measures are conducive to improving expectations for the property chain and domestic demand.
Overseas conditions added volatility to Hong Kong stocks. U.S. initial jobless claims for the week ending August 15 were 206,000, below both the 210,000 consensus and the prior 212,000, indicating labor-market resilience. But the U.S. 30-year Treasury yield once broke above 5.31%, the highest since 2007, while the 10-year yield also resumed its uptrend. The Fed’s July minutes showed that several officials believed further hikes should still be considered if inflation does not continue to decline, suppressing expectations for policy easing in September. At the same time, U.S. debt outstanding surpassed USD 40 trillion, and U.S. investment-grade bond issuance increased rapidly—both adding pressure to long-end rates. Hong Kong stocks are relatively sensitive to global liquidity; if U.S. Treasury yields stay elevated, valuation expansion may remain constrained.
By sector, O’Neil industry data showed that the top three gainers in Hong Kong this week were: Bldg-Maintenance & Svc(G7340IG.HK), up 30.22% and ranked first, benefiting from favorable property-related policies and recovering demand for home services; Retail-Home Furnishings(G5710IG.HK), up 19.66% and ranked second, with broad strength in home-consumption names; and Mining-Gold/Silver/Gems(G1040IG.HK), up 18.4% and ranked third, with precious metals and mining supported by both safe-haven demand and rising gold prices. The three leading sectors were concentrated in property services, home consumption, and precious-metals mining, indicating active positioning in defensive and consumption themes under dual drivers of policy support and risk aversion, with industry strength rankings all near the top.
U.S. equities weakened overall this week: the Dow Jones Indus Actual(0DJIA) fell 1.81%, the S & P 500 Index(0S&P5) fell 1.86%, and the Nasdaq Composite(0NDQC) fell 2.48%. None of the three major indices made a weekly or 52-week new high, and the Nasdaq underperformed the Dow materially, reflecting heavier pressure on high-valuation tech stocks.
The biggest current pressure on U.S. stocks comes from the bond market. The 30-year U.S. Treasury yield once climbed above 5.31%; the rapid rise in long-end rates increased equity discount rates, which is especially unfavorable for growth/tech stocks. After the U.S. Treasury expanded long-term bond buybacks to above USD 4 billion, Treasury yields fell notably and U.S. stocks rebounded accordingly. But after the impact of Treasury intervention faded on August 21, 10-year and 30-year yields resumed rising, indicating that bond supply-demand dynamics and fiscal pressure remain key market risk variables.
Inflation and geopolitical factors further increased uncertainty for U.S. equities. Threats of tougher economic sanctions on Iran by Trump pushed WTI up 2.5% and Brent up 2.4%, bringing oil prices back to highs since late July and potentially lifting inflation expectations again. Meanwhile, the Fed minutes were hawkish, and the market remained alert to further rate-hike risks. On tariffs, Trump postponed the planned 50% tariff on Canada, temporarily easing trade tensions, but the U.S.-Iran situation may still affect monetary policy via energy prices and inflation expectations.
A-shares showed clear high-volatility characteristics this week. CSI 300(000300) fell 1.01% this week. On the last trading day, turnover was 36.94% below the 50-day average, and the index remained below the 5-, 10-, 20-, 50-, and 200-day moving averages, indicating weaker short-term technicals than Hong Kong stocks.
The policy environment for A-shares remained relatively positive. The new policy-based financial instrument scale reached RMB 800 billion; Shanghai’s new property policy lowered some down-payment ratios to 15%; the State Council revised housing provident fund regulations; and on the industrial side, policy catalysts included commercial licensing for satellite IoT, “AI + transportation,” and the robotics industry. Meanwhile, margin financing and securities lending balance rose for 8 consecutive trading days to RMB 2.68 trillion, indicating still-high participation. However, July electricity-consumption growth slowed to 1.7%, while rising U.S. Treasury yields, a hawkish Fed, and U.S.-Iran geopolitical risks may all create external pressure on A-shares through risk appetite and global capital pricing.
This week, Top 33 rose 2.65% on average: among 33 constituents, 27 rose and 6 fell. The best performer was SITC(01308), up 20.3% this week, in O’Neil industry Transportation-Ship(G4411IG.HK), with Industry Group Rank 7, O’Neil Score 74, and RS Rating 93. PACIFIC BASIN(02343) rose 13.4%, also in Transportation-Marine, with O’Neil Score 86 and RS Rating 92. WUXI BIO(02269) rose 12.98%, in Medical-Research Eqp/Svc(G8058IG.HK), with Industry Group Rank 6 and EPS Rating 96. The Model Portfolio rose 4.50% on average this week, with both holdings up. The best holding, BEONE MEDICINES(06160), rose 7.95% this week, in O’Neil industry Medical-Biomed/Biotech(G8063IG.CN), with O’Neil Score 77 and RS Rating 82. Latest quarterly revenue grew 29.63% YoY, showing support from both fundamentals and capital flow.
Hong Kong technicals improved. HSI moved back above key moving averages, and the short-term trend improved versus earlier periods. However, it remains about 7.29% below its 52-week high of 28056.10, so no new-high breakout has formed yet. On the last trading day, turnover was 14.08% below the 50-day average. Although weekly turnover rose about 4.45% versus the previous week, the rise still lacked clear volume confirmation. Technically, focus can be placed on support near 25600–25700 (short-term moving averages and the 200-day MA). On the upside, first watch the prior high zone, with further resistance near 28056. HSTECH remains 7.52% below its 200-day MA, with notably weaker technical strength than HSI.
Southbound funds recorded a net outflow of about HKD 11.584 billion this week. Net buy was HKD 3.077 billion on Monday and surged to HKD 14.0 billion on Tuesday, then turned to net sell of HKD 10.621 billion and HKD 10.412 billion on Wednesday and Thursday, respectively, showing accelerated outflows in the second half of the week. Alibaba continued to attract attention: about HKD 2.4 billion added on Tuesday and still about HKD 2.2 billion net bought on Thursday. Meanwhile, Hua Hong Semicon was net sold by nearly HKD 3.0 billion on Wednesday. The flow pattern—first inflow, then outflow—suggests low-level positioning demand remains, but short-term profit-taking pressure has increased.
Looking ahead, Hong Kong stocks remain in an environment shaped by domestic policy support versus overseas rates and geopolitical risks. Continued policy efforts in domestic property, consumption, and industry may help improve risk appetite. Strong directions such as semiconductors, biopharma, and shipping still merit attention. However, elevated long-end U.S. yields, rising oil prices, and a hawkish Fed may limit valuation repair in Hong Kong equities. If HSI can hold support near 25600–25700 and see improved turnover, the reliability of a continued rebound would increase. If southbound outflows persist and U.S. yields continue to rise, renewed index weakness should be watched closely.
During periods of intensified market volatility, focus should be placed on turnover, fund flows, and changes in industry relative strength. Avoid chasing high-volatility stocks based only on short-term gains; investment decisions should be made prudently in line with one’s own risk tolerance.
What do you think? Please email us any questions or comments.
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 21, 2026