Hang Seng Index rises 0.04%
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Hong Kong stocks showed a “surge followed by pullback” pattern this week. The Hang Seng Index(HSI) rose 0.04% for the week, while the Hang Seng TECH Index(HSTECH)fell 1.01%.
On the macro front, external pressure and domestic support coexisted. The U.S. S&P Global Manufacturing PMI rose to 57 in September, a 52-month high; the Services PMI climbed to 58.7, a 59-month high; and the preliminary Composite PMI advanced to 58.4. The strong data directly boosted expectations for rate hikes. Federal Reserve Governor Barr said further rate increases may be needed, while Musalem said hikes should be “earlier and gradual.” Goldman Sachs forecast that another rate hike in October could be the “finale” of the current cycle. U.S. Treasury yields across multiple maturities broke above 5%, with the 10-year yield once touching 5.041%, continuing to weigh on Hong Kong stock valuations. U.S. EIA crude oil inventories increased by 2.969 million barrels in the week ended September 18, far exceeding expectations for a decline of 641,000 barrels. Together with disruptions to Middle East supply, U.S. retail diesel prices broke above USD 6.5 per gallon to a record high, pushing up global inflation expectations.
Domestically, the PBOC conducted RMB 800 billion of MLF operations on September 24, increasing liquidity by RMB 200 billion and marking the third consecutive month of net injections. From September 28 to October 8, it also conducted overnight reverse repos of up to RMB 1 trillion per day. The 1-year LPR remained at 3.0% and the 5-year LPR stayed at 3.5%, unchanged for 16 consecutive months. The RMB central parity rate was raised for nine consecutive trading days, once touching the 6.70 level. President Xi Jinping paid a state visit to the United States from September 23 to 25, and Trump went to Andrews Air Force Base to greet him, marking the first time since 1962 that a U.S. president personally went to the airport to welcome a visiting leader. This released a positive signal of improving China-U.S. relations. Rumors of mortgage interest subsidies once pushed the property sector higher, though several brokerage analysts viewed the likelihood as low.
Among industry sectors, the top three O’Neil industry gainers were Bldg-Wood Prds(G2400IG.HK), up 24.99% for the week; Telecom-Cable/Satl Eqp(G4893IG.HK), up 15.74%; and Retail-Home Furnishings(G5710IG.HK), up 7.49%. The Bldg-Wood Prds sector led the broader market, driven by rising expectations for domestic real-estate policy support and rumors of interest subsidies on housing loans. The Telecom-Cable/Satl Eqp sector benefited from policies promoting dual 10-gigabit networks, low-Earth-orbit satellite internet development, and expanded computing capacity. The Retail-Home Furnishings sector also strengthened on expectations of a recovery in the real-estate value chain. Healthcare was the strongest and most sustained outperformer this week. On Monday, the Hang Seng Biotech Index rose more than 5%, and it remained active on Wednesday, resonating across markets with the A-share CRO sector. The property sector warmed up on Monday and strengthened on Wednesday, driven by rumors of mortgage interest subsidies and policy expectations. The software and media sector rose on Tuesday, related to Meta’s Muse app surpassing ChatGPT in downloads and daily active users less than two weeks after launch, as capital searched for “China’s Muse” targets. Tencent Holdings (00700) rose 5% on Tuesday. Internet and technology stocks strengthened on Tuesday but led the decline on Wednesday, affected by the pullback in U.S. tech stocks. The energy sector led losses on Wednesday amid repeated volatility around the Strait of Hormuz situation in Iran and oil price fluctuations.
The three major U.S. stock indices diverged this week, showing a “strong first, weak later” pattern. The Dow Jones Indus Actual(0DJIA) fell 0.33% for the week; the Nasdaq Composite(0NDQC) rose 1.56%; and the S & P 500 Index(0S&P5) gained 0.73%. On Monday, semiconductor stocks led gains, with ARM rising more than 17% and Intel up over 12%. On Tuesday, Apple’s market capitalization once exceeded USD 5 trillion. On Wednesday, all major indices pulled back as strong PMI data boosted rate-hike expectations.
The core driver was the tug-of-war between strong PMI-driven rate-hike expectations and AI industry catalysts. U.S. September Manufacturing PMI of 57 and Services PMI of 58.7 both reached multi-month highs, directly lifting expectations for a Federal Reserve rate hike in October. U.S. Treasury yields across multiple maturities broke above 5%, and the market worried about signals from an inverted yield curve. AI industry catalysts were intensive: Anthropic launched Opus 5.5, with usage costs 40% lower than Opus 5; OpenAI launched GPT-6SOL and GPT-6LUNA, cutting API prices by 50%; Alibaba’s Apsara Conference announced full-scale investment in AI infrastructure, targeting data center capacity of more than 20GW by 2032; and T-Head released the Zhenwu V900 chip, with computing power three times higher than M890. Global semiconductor revenue in Q2 2026 exceeded USD 425 billion, setting a record. TSMC foundry prices are expected to rise another 3%-6% in 2027, and the long-term contract price increase trend for 12-inch silicon wafers in 2027 has been established. Trump’s approval rating fell to 32%, a political career low, and he said at the UN General Assembly that an agreement with Iran may be reached after the midterm elections. Iran proposed conditions for reopening the Strait of Hormuz and introduced a new law imposing a fine equal to 20% of cargo value on vessels violating transit rules, leaving geopolitical uncertainty intact.
A-shares also surged before pulling back this week, with the CSI 300(000300) falling 1.51% for the week. By sector, real estate gained strongly on Monday, triggering a wave of limit-up moves, with Vanke A, Gemdale, and Financial Street hitting limit up. CRO and healthcare stocks continued to strengthen, resonating with Hong Kong stocks. PCB, copper-clad laminate, and glass substrate stocks rose against the market on Wednesday, related to semiconductor silicon wafer price increases and expectations of TSMC price hikes. Automobiles and home appliances were active on Tuesday, with JAC Motors hitting limit up on heavy volume, benefiting from the policy direction of “AI + manufacturing.” Previously popular themes such as tungsten hexafluoride and semiconductor equipment corrected, as capital rotated from high-level names to lower-positioned stocks.
Policy signals remained positive. The central bank conducted RMB 800 billion of MLF operations with an additional RMB 200 billion net injection, and overnight reverse repos of up to RMB 1 trillion per day, signaling ample liquidity. However, as the LPR remained unchanged for 16 consecutive months, short-term rate-cut expectations cooled. President Xi’s U.S. visit and China-U.S. economic and trade consultations boosted market risk appetite, serving as an important catalyst for Monday’s 0.97% jump in A-shares. Premier Li Qiang emphasized “AI + manufacturing” during an inspection trip in Shanghai. The Ministry of Industry and Information Technology advanced dual 10-gigabit networks, low-orbit satellite internet, and computing power expansion. The 15th Five-Year Plan for the light industry and textile sectors targets revenue of more than RMB 30 trillion by 2030. In August, total electricity consumption reached 1.0332 trillion kWh, up 1.7% year on year, while peak power load reached a record high of 1.56 billion kW. On tariffs, Chinese and U.S. economic and trade teams maintained close communication on issues such as tariff reductions. China Securities pointed out that A-shares have entered a second round of recovery, recommending scarce computing-power supply segments on offense and dividend assets as a defensive base.
Top 33 rose an average of 0.06% this week, with 19 of its 33 constituents gaining and 14 declining. Among them, WUXI XDC(02268) led with a weekly gain of 3.31%, an O’Neil Score of 71, RS Rating of 89, EPS Rating of 92, and Industry Rating of 41. Its latest quarterly revenue grew 37.04% year on year, with the highly prosperous ADC drug CRDMO track supporting continued earnings delivery. INNOVENT BIO(01801) rose 3.31% for the week, with an O’Neil Score of 75, RS Rating of 85, and Industry Rating of 40. Its latest quarterly revenue increased 44.76% year on year, and its innovative drug pipeline continued to advance. CHINA MER PORT(00144) rose 3.27% for the week, with an O’Neil Score of 64, RS Rating of 82, and Industry Rating of 62. Its price-to-book ratio is only 0.6, leaving significant room for valuation recovery. Since inception, the portfolio’s cumulative return has continued to outperform the Hang Seng Index (HSI), demonstrating the excess return potential of selected quality assets in a volatile market. The model portfolio fell an average of 0.73% this week, with one of its two constituents rising and one declining. BEONE MEDICINES(06160) rose 1.22% for the week, with an O’Neil Score of 74, RS Rating of 85, Industry Rating of 40, and latest quarterly revenue growth of 29.63% year on year. MIDEA GROUP(00300) fell 2.67% for the week, with an O’Neil Score of 70, RS Rating of 82, EPS Rating of 92, Industry Rating of 24, return on equity as high as 20.29%, and latest quarterly revenue growth of 4.39% year on year.
Technically, the Hang Seng Index(HSI) is currently below all major moving averages: -0.54% from the 5-day average, -0.23% from the 10-day average, -1.31% from the 20-day average, -2.26% from the 50-day average, and -3.21% from the 200-day average. The short-term moving average system is tilted bearish, and the medium-term trend remains weak. The index is down 11.74% from its one-year high of 28,056.1 and up 9.96% from its one-year low of 22,518.0, placing it in the middle of its one-year range. On the downside, the first support level is around 24,500, the second support level is around 24,000, and strong support lies at the one-year low of 22,518. On the upside, the first resistance level is around 25,000, the second around 25,500, and strong resistance near 26,000. The Hang Seng TECH Index(HSTECH) has an even weaker technical structure, standing -0.92% from its 5-day average, -1.6% from its 20-day average, -5.70% from its 50-day average, and -12.71% from its 200-day average. It is down 35.06% from its one-year high and only 3.10% above its one-year low of 4,229.94. Support is around 4,230, while resistance is around 4,500 and 4,700. In terms of turnover, the Hang Seng Index’s final-day trading volume was 37.64% below its 50-day average, while Hang Seng TECH volume was 47.4% lower, indicating strong wait-and-see sentiment amid shrinking turnover.
Southbound capital recorded sustained and substantial net inflows this week, with cumulative net buying of approximately HKD 23.238 billion, significantly higher than the previous week’s HKD 12.007 billion. Net buying reached HKD 4.074 billion on Monday and surged to about HKD 12.7 billion on Tuesday, the weekly peak. On Wednesday, despite a 1.01% decline in the Hang Seng Index, southbound investors still recorded net buying of more than HKD 3.4 billion. Tencent Holdings (00700) received net inflows of over HKD 2 billion in a single day, reflecting mainland investors’ firm willingness to allocate to core technology assets. Southbound capital continued to add positions during market pullbacks, showing a clear pattern of “buying aggressively on sharp declines.” Against the backdrop of elevated U.S. Treasury yields and rising geopolitical risks, the relative allocation value of Hong Kong dividend assets became more evident.
This week, global markets revolved around three main themes: “improving China-U.S. relations,” “rising expectations for Federal Reserve rate hikes,” and “intensive AI industry catalysts.” Hong Kong stocks surged on Monday on the positive impact of President Xi’s U.S. visit, but then pulled back under pressure from U.S. Treasury yields breaking above 5% and hawkish Fed signals. Healthcare stocks continued to strengthen, while large southbound inflows provided downside support. Looking ahead, market focus will center on the Federal Reserve’s October policy meeting and rate-hike path, developments in the Strait of Hormuz situation in Iran and oil price trends, follow-up progress in China-U.S. tariff reduction negotiations, and the semiconductor price-increase cycle as well as earnings delivery across the AI industry chain. The above content is based on public data and market information analysis and does not constitute investment advice. Markets involve risks, and investment should be made with caution.
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published on September 24, 2026