Hong Kong market sees strong rally; Hang Seng Tech Index leads rebound

The Hong Kong stock market extended its early-November gains on Thursday, rising by as much as 950 points to retake the 24,000 level for the first time in two weeks, as analysts forecast a further upward trend for the rest of the year.

The benchmark Hang Seng Index rose 3.67 percent to 24,796.98 on Thursday, marking its fifth straight session of gains, while the Hang Seng Tech Index advanced 5.55 percent to 4,154.29.

Yang Delong, chief economist at First Seafront Fund, said global stock markets rallied broadly as the US midterm election results were called. The outcomes lifted market expectations for an end to the Middle East conflict, sending international crude oil prices tumbling more than 8 percent. Yang said cheaper oil is expected in turn to ease inflation and temper investors’ bets on further US Federal Reserve rate hikes — a boon for global capital markets.

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Kenny Ng Lai-yin, a strategist at Everbright Securities International, said the Hang Seng Index could test 25,000 by year-end. “That level marks the upper edge of the descending trend formed after the benchmark pulled back from its 26,000 peak, acting as a watershed that distinguishes between a fleeting rebound and a lasting reversal of its downtrend,” he said.

Hong Kong-listed technology and internet giants rallied broadly on Thursday, with Xiaomi Corp and Alibaba Group Holding Ltd both rising more than 8 percent at the close, while Tencent Holdings Ltd climbed over 7 percent.

“In Hong Kong’s stock market, mature internet platform stocks and artificial-intelligence-focused tech stocks have seen an obvious seesaw dynamic,” Ng said. The US midterm election results, together with concerns over AI firms’ heavy capital spending, may push funds toward tech segments with relatively depressed valuations — notably, mature internet-platform stocks with a decent recovery scope, he added.

China International Capital Corp said in a recent report that low valuations and oversold sentiment have created the conditions for a short-term rebound.

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Thomas Ip Hon-tak, vice-chairman of the Hong Kong Securities and Futures Professionals Association, said that as the market has just started a long-accumulated trend, blue chips, large caps and general exchange-traded funds covering broad markets — but not AI, semiconductors or oil stocks — are expected to lead the first wave of gains.

With AI-related stocks having fallen over the past month, Ip said their short-term rebound will likely come after the rally in blue chips and large- or even mid-cap stocks.

On the capital flow front, although the southbound trading through Stock Connect posted a month-to-date net outflow of HK$5.65 billion ($720 million) in November, the channel saw a sharp single-day net inflow of HK$23.42 billion on Tuesday, its largest daily net purchase since mid-May, according to Hong Kong Exchanges and Clearing Ltd.

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In a Wednesday research note, CITIC Securities said that it expects a recovery in southbound investment in 2027 to ease Hong Kong stock market liquidity strains, alongside a broader equity rebound. It projects 7.4 percent earnings growth for the Hang Seng Index next year, with the tech index poised for a sharper bounce to a 24.8 percent earnings expansion.

Gaby Lin contributed to this story.

Contact the writer at charlottezhou@chinadailyhk.com