Hang Seng Index Falls 0.22%
Editor’s Note: As always, we would appreciate any feedback you have. It will help us make this app more useful to you.
The Hong Kong stock market traded within a narrow range this week, with the two major indexes diverging. The Hang Seng Index(HSI) fell 0.22% for the week, while the Hang Seng TECH Index(HSTECH) rose 1.97%.
On the macro front, external risks were intertwined with positive domestic developments. The Federal Reserve unanimously approved a 25-basis-point rate hike to 3.75%-4.00%. The dot plot indicated one more rate hike this year, a year-end rate of 4.1% in 2026, no change in 2027, and no rate cut until 2028. The return of inflation to the 2% target was postponed until 2029, making the stance more hawkish than expected. The 10-year U.S. Treasury yield surged to a peak of 5.041%, its highest level since 2007, while the 20-year Treasury auction yield reached a record 5.42%. The broad rise in long-term interest rates continued to suppress Hong Kong equity valuations. In the Middle East, a key Saudi oil pipeline was damaged in an attack, while Iran said the Strait of Hormuz had been closed and placed under “smart control.” Brent crude rose to US$108.48 per barrel, while WTI crude reached US$105.48 per barrel, lifting global inflation expectations. The Bank of Japan raised rates by 25 basis points, marking its fastest pace of rate hikes since 1990 and intensifying the synchronized tightening by global central banks.
Domestically, Hong Kong unveiled its first five-year plan for 2026-2030. The plan proposes revising the listing regime for specialist technology companies, including renminbi counters in Stock Connect, and building a commodity trading ecosystem, all of which should support the depth of Hong Kong’s equity market over the medium to long term. People’s Bank of China Governor Pan Gongsheng published an article emphasizing the need to maintain the stable operation of the stock, bond, and foreign exchange markets, continue transforming the monetary policy framework, place less emphasis on quantitative targets, and shift toward price-based regulation. Value-added industrial output from enterprises above the designated size rose 5.2% in August, accelerating by 0.7 percentage points from July, with new growth drivers contributing more than 60%. However, total retail sales increased by only 0.4% in August, while fixed-asset investment fell 7.2% in the first eight months, including a 19.9% decline in property investment. Domestic demand and real estate therefore remained a drag on the economy. Incremental aggregate social financing reached RMB23.91 trillion in the first eight months, with direct financing accounting for a larger share than loans for the first time. The Ministry of Commerce confirmed that the Chinese and U.S. economic and trade teams remain in close communication on tariff reductions and other issues. Wang Yi also spoke by phone with U.S. Secretary of State Marco Rubio to prepare for the next phase of high-level exchanges. Expectations for a marginal improvement in China-U.S. relations provided a positive catalyst for Hong Kong stocks.
At the industry level, the top three O’Neil industries by weekly gain were Security/Sfty(G3999IG.HK), up 63.94%; Telecom-Cable/Satl Eqp(G4893IG.HK), up 33.20%; and Computer-Hardware/Perip(G3580IG.HK), up 18.58%. Security/Sfty led the gains as the escalation of geopolitical conflict in the Middle East triggered a sharp rise in security demand. Telecom-Cable/Satl Eqp benefited from its defensive, high-dividend characteristics amid the global central-bank tightening cycle, as well as accelerating investment in AI computing infrastructure. Computer-Hardware/Perip strengthened following Huawei’s launch of the Ascend 960 supernode AI computing platform and catalysts from the electronic information manufacturing industry’s 15th Five-Year Plan.
The three major U.S. stock indexes diverged this week, with the market entering a “buy the fact” phase after the rate hike. The Dow Jones Indus Actual(0DJIA)fell 1.51% for the week; the Nasdaq Composite(0NDQC) rose 0.32%; and the S & P 500 Index(0S&P5) fell 0.25%.
The core driver was the tug-of-war between the Federal Reserve’s hawkish rate-hike path and catalysts from the AI industry. U.S. retail sales rose 1.2% month over month in August, well above the 0.8% forecast, while initial jobless claims came in at 196,000, below the expected 208,000. The labor market remained resilient, providing data support for the Fed’s hawkish position. After the 10-year Treasury yield surpassed 5% and the rate hike was implemented, expectations that long-term yields had peaked became a catalyst for a rebound. Divergence across the AI value chain intensified. Before the rate hike, concerns about slowing AI development triggered a sharp correction. After the hike, Nvidia gained more than 2%, with CEO Jensen Huang saying chip sales would double next year. Intel rose 7%, AMD gained more than 6%, and Micron Technology advanced more than 5%. The V-shaped rebound showed that the AI theme remained resilient. OpenAI’s valuation surged to US$1.2 trillion, but its disclosure of six instances of abnormal model behavior raised regulatory concerns. Anthropic is targeting a Nasdaq listing in October, potentially at a valuation of US$2 trillion. Trump publicly criticized the rate hike as “quite regrettable,” urged the Fed to cut rates below 1%, and proposed distributing a US$5,000 “Trump dividend” to every U.S. adult, intensifying the confrontation between the White House and the Federal Reserve. Cryptocurrency-related stocks were hit after the Senate rejected the CLARITY Act. The Bank of Japan raised rates by 25 basis points, reinforcing the synchronized tightening by global central banks.
A-shares consolidated in volatile trading this week, with pronounced structural divergence. The CSI 300(000300) fell 0.06% for the week and was virtually flat. Semiconductors and optical communications led the broader market. Innovative pharmaceuticals and agriculture strengthened on September 18. Among weaker sectors, AI hardware continued to correct.
Policy developments continued to send positive signals. Xi Jinping issued important instructions on developing advanced manufacturing, while Li Qiang advanced the “AI + Manufacturing” initiative. The electronic information manufacturing industry’s 15th Five-Year Plan set a target for revenue at enterprises above the designated size to exceed RMB30 trillion by 2030 and called for breakthroughs across the entire integrated-circuit value chain. PBOC Governor Pan Gongsheng explicitly called for placing less emphasis on quantitative targets and shifting toward price-based regulation, leaving room for further structural easing. August financial data showed that more credit resources were directed toward new growth drivers such as technological innovation and green transformation. Interest rates on newly issued corporate loans were slightly below 3% in August, while personal mortgage rates stood at 3.1%, both near historical lows. On tariffs, the U.S. Congress authorized Trump to impose additional tariffs on countries purchasing Russian petroleum products. China’s Ministry of Commerce responded that the Chinese and U.S. economic and trade teams remain in close communication regarding tariff reductions.
The Top 33 portfolio fell by an average of 0.66% this week, with 12 of its 33 constituents advancing and 21 declining. SA SA INT’L(00178) led with a weekly gain of 13.11%. It had an O’Neil Score of 79, an RS Rating as high as 95, and an EPS Rating of 89, with a recovery in beauty retail driving the share price higher. WUXI XDC(02268) rose 6.80% for the week, with an O’Neil Score of 71, an RS Rating of 90, and an EPS Rating of 92. Revenue increased 37.04% year over year, while the ADC drug CRDMO segment maintained strong momentum. JNBY(03306)gained 3.41% for the week, with an O’Neil Score of 70, an RS Rating of 81, and an EPS Rating of 89. Its return on equity reached 37.17%, highlighting the strong profitability of its design-driven brands. Since inception, the portfolio’s cumulative gain has continued to outperform the Hang Seng Index (HSI), demonstrating its ability to generate structural excess returns through the selection of high-quality assets. The Model Portfolio rose by an average of 1.60% this week, with both constituents advancing. BEONE MEDICINES(06160) led with a weekly gain of 3.10%. It had an O’Neil Score of 74 and an RS Rating of 85, while revenue increased 29.63% year over year, reflecting the continued delivery of results by this global biotechnology leader. MIDEA GROUP(00300) rose 0.10% for the week, with an O’Neil Score of 72, an RS Rating of 84, and an EPS Rating of 92. Its return on equity was 20.29%, highlighting its defensive characteristics.
From a technical perspective, the short-term pattern of the Hang Seng Index(HSI) remained weak. Its current level was slightly above the five-day moving average (+0.08%) but below the 10-day (-0.77%), 20-day (-1.85%), 50-day (-2.19%), and 200-day (-3.32%) moving averages. With all medium- and long-term moving averages breached, the medium-term trend remained under pressure. The index was 11.78% below its one-year high of 28,056.1 points and 9.92% above its one-year low of 22,518.0 points, placing it near the middle of its one-year range. The first support level is around 24,500 points, followed by 24,000 points, with strong support at the one-year low of 22,518.0 points. The first resistance level is around 25,000 points, followed by 25,500 points, with strong resistance near 26,000 points. The Hang Seng TECH Index(HSTECH) had a slightly better technical pattern than the HSI. Its current level was above the five-day (+1.74%) and 10-day (+0.80%) moving averages but remained below the 20-day (-1.52%), 50-day (-5.29%), and 200-day (-12.25%) moving averages. It was 34.40% below its one-year high and only 4.15% above its one-year low of 4,229.94 points. Support is around the one-year low near 4,230 points, while resistance is around 4,500 and 4,700 points. In terms of trading volume, the HSI’s final-day volume was 5.13% above its 50-day average, while HSTECH’s was 6.97% higher. Their volume ratios relative to the previous week were 0.97 and 0.98, respectively, indicating a slight overall recovery in trading activity.
Southbound capital recorded continued net inflows this week, with cumulative net buying of approximately HK$12.007 billion, extending the previous net-buying trend. Net buying reached a weekly peak of HK$4.471 billion on Monday, indicating strong demand for bargain hunting. It dropped sharply to HK$881 million on Tuesday amid a strong wait-and-see mood, rebounded to HK$2.1 billion on Wednesday, and reached HK$3.363 billion on Thursday. Against the backdrop of synchronized tightening by global central banks and rising geopolitical risks in the Middle East, continued southbound inflows provided important downside support for Hong Kong stocks. High-dividend assets and AI-related stocks became key areas of focus for mainland investors.
Global markets this week revolved around three main themes: “the Federal Reserve restarting rate hikes,” “the Middle East conflict and surging oil prices,” and “divergence within the AI industry.” Hong Kong stocks traded within a narrow range under pressure from surging U.S. Treasury yields and geopolitical risks. The Hang Seng TECH Index nevertheless closed higher, while continued southbound capital inflows indicated strong downside support. Looking ahead, the market will focus on the pace of further Federal Reserve rate hikes and changes in economic data, developments in the Middle East conflict and oil-price trends, the valuation-anchoring effect of Anthropic’s October IPO, progress in China-U.S. tariff-reduction negotiations, and the implementation schedule for supporting measures under Hong Kong’s first five-year plan. Investors may consider opportunities in domestic substitution themes such as semiconductor equipment and AI computing power, as well as high-dividend assets including banks and utilities. The above analysis is based on publicly available data and market information and does not constitute investment advice. Markets involve risks, and investment decisions should be made with caution.
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 September 18, 2026