Hang Seng Index recovers 25,000 on shrinking volume; analysts say further observation needed after stabilization

September 21 (Cailianshe, Editor Feng Yi) — Hong Kong stocks saw a short-term rebound today, with the Hang Seng Index and the Hang Seng China Enterprises Index both closing over 1% higher, while the Hang Seng Tech Index rose 0.4%.

Tech Stocks Strengthen in Afternoon; Sentiment Improves

Large-cap tech stocks rallied in the afternoon session, lifting overall market sentiment. Xiaomi rose over 4%, Alibaba gained 3%, and Tencent and Baidu both advanced more than 2%. Meituan and JD.com also turned positive.

In other sectors, the biomedical sector saw broad gains, while AI hardware stocks rebounded actively, with Shenzhen Success Electronics surging nearly 13%. Real estate, solar energy, and coal stocks also strengthened notably.

On the downside, home appliances, non-ferrous metals, and gold stocks declined.

Overall, short-term risk appetite in Hong Kong stocks showed signs of recovery. The Hang Seng Index closed back above the 25,000-point mark today, but total turnover stood at HK$202.731 billion. The sustainability of the rebound remains to be seen given the shrinking volume.

Short Selling Data

Total short selling amounted to HK$27.283 billion, equivalent to 13.46% of the Hang Seng Index's turnover, remaining near recent average levels.

The top three stocks by short selling value were:

• Tencent Holdings: HK$1.062 billion
• Alibaba-W: HK$895 million
• Xiaomi Group-W: HK$811 million

Macro Uncertainty Eases; AI and Innovative Drugs Attract Attention

At the sector level, most segments posted broad gains today, with only gold, non-ferrous metals, and other previously favored safe-haven assets retreating.

In the near term, the Hang Seng Index's rebound above the 25,000-point mark carries some symbolic significance. Active capital clearly favors rotation opportunities in sectors with strong earnings, policy support, and industrial momentum.

Notably, following the Federal Reserve's rate hike, overseas AI hardware stocks still rose against the trend, suggesting that macro variables are affecting valuations more than fundamentals.

CITIC Securities commented that given the high-interest-rate environment, market divergence may widen again during the final offensive window of the year, with AI likely to regain dominance.

Meanwhile, the independent growth trajectory of the innovative drug sector is also drawing attention. Data shows that the total value of out-licensing deals by domestic pharmaceutical companies has exceeded US$120 billion this year, up 36% year-on-year. Large transactions have become frequent, and with multiple companies accelerating "A+H" dual listings, the sector's pricing logic may also be shifting.

A-Share Market Rises; Brokers Say Hong Kong Market Needs Further Observation

The A-share market also opened higher and accelerated its rebound today. However, total turnover on the Shanghai and Shenzhen stock exchanges was 2.03 trillion yuan, down 45.6 billion yuan from the previous trading day. On the surface, hot sectors rotated quickly, with over 4,500 stocks rising, indicating an accelerating short-term rebound.

Looking ahead, Huatai Securities believes that while interest rate volatility has declined, point risks have not yet been resolved, and earnings expectations have not yet recovered. The Hong Kong market may see a short-term stabilization and rebound, but the duration and extent remain to be seen. In particular, with U.S. Treasury yields still hovering around 5%, oil prices and inflation may determine the subsequent path.

Allocation Strategy

• Dividend stocks remain a core holding, but exposure to sectors where dividend yield advantages relative to A-shares are narrowing and payout ratio increases are difficult—such as banks and coal—should be controlled.
• Increase allocation to petrochemicals and gas, which offer better value.
• Innovative drugs and CXO leaders have already seen some recovery in the post-rate-hike trading environment and can be held.