US September CPI came in above expectations, boosting bets on rate hikes, while the Philadelphia Semiconductor Index fell 4.30% overnight, marking its sixth consecutive decline.
Hong Kong stocks opened lower and drifted down today, with the Hang Seng Index closing at 24,062.72 points, down 1.03%, on turnover of about HK$224.2 billion; the Hang Seng Tech Index closed at 4,060.99 points, down 2.72%; and the Hang Seng China Enterprises Index closed at 8,103.27 points, down 0.98%.
Among the larger Hong Kong ETFs, Tracker Fund of Hong Kong (02800) fell 1.12% to HK$24.72; Hang Seng China Enterprises (02828) dropped 0.98% to HK$83.24; and CSOP Hang Seng TECH Index Daily (2x) Leveraged Product (07226) slid 5.19% to HK$2.482. In the A-share market, several broad-based ETFs saw significantly higher volume in the afternoon, with Huatai-PineBridge CSI 300 ETF (510300.SH) recording turnover of about RMB 6.665 billion, exceeding the full-day level of the previous trading session.
Sector Performance
South Korean stocks triggered a circuit breaker, and Hong Kong-Korea semiconductor leveraged products plunged. By the close, CSOP SK Hynix Daily (2x) Leveraged Product (07709) fell 24.31% to HK$18.68, CSOP Samsung Electronics Daily (2x) Leveraged Product (07747) dropped 20.94% to HK$45.30, TR Korea (02848) declined 9.23% to HK$1,495.5, Bosera Hong Kong-Korea Semiconductor (03516) fell 8.18% to HK$7.69, Huatai Yingke Hong Kong-Korea Semiconductor (03569) dropped 8.36% to HK$6.19, and CSOP Hong Kong-Korea Technology (03431) fell 5.97% to HK$8.90.
On October 15, South Korea's KOSPI plunged 8% intraday, triggering its tenth circuit breaker of the year. US September inflation data came in above expectations, reviving rate hike expectations, while elevated long-term rates pressured high-valuation growth stocks. At the same time, volatility in share prices and bond yields of AI infrastructure companies such as CoreWeave also prompted the market to reassess the financing sustainability of AI capital expenditure. Data from the Korea Exchange on October 14 showed that, as of the previous trading day, foreign investors had net sold a cumulative 203.6977 trillion won in the KOSPI main board market so far this year. According to the latest reports, South Korean financial regulators held an emergency meeting on the stock market and ordered proactive measures to ensure market stability and investor protection.
Overnight, the US AI hardware chain sold off sharply, and related ETFs in Hong Kong and A-shares fell broadly. By the close, Value Partners Optical Communication (02811) fell 8.65% to HK$12.25; on the A-share side, Guotai Communication ETF (515880.SH) dropped 4.93% to RMB 0.521, Yinhua Communication ETF (159994.SZ) fell 4.05% to RMB 0.994, and Harvest STAR Chip ETF (588200.SH) declined 2.29% to RMB 0.938.
US September CPI coming in above expectations reinforced expectations that interest rates will stay higher for longer, increasing valuation discount pressure on long-duration growth assets. Overnight, the Philadelphia Semiconductor Index fell 4.30%, its longest six-day losing streak since May 2025, with optical communications and memory segments among the biggest decliners, as market doubts over the return cycle of AI computing capital expenditure reheated. In addition, domestic optical module and computing hardware names had accumulated large gains earlier and had relatively high crowding in trading; against the backdrop of rumors that the US plans to restrict Chinese optical modules and the approaching third-quarter earnings verification window, funds chose to reduce exposure first to segments with stretched valuations.
Cryptocurrencies fell across the board, with related leveraged products in Hong Kong leading the declines. By the close, CSOP MSTR Daily (2x) Leveraged Product (07799) fell 15.02% to HK$3.86, CSOP Coinbase Daily (2x) Leveraged Product (07711) dropped 12.55% to HK$20.62, and Bosera Ether (03009) declined 5.21% to HK$18.00. Affected by above-expectation US inflation data, rising expectations for further Federal Reserve rate hikes, and a selloff in tech stocks, Bitcoin fell below $82,000. Although the cryptocurrency market as a whole came under pressure, the latest survey showed that analysts' bullish sentiment toward Bitcoin strengthened notably, highlighting the divergence between short-term market performance and medium- to long-term expectations. A report released Wednesday by cryptocurrency research firm CryptoQuant showed that Bitcoin's 30-day analyst consensus index jumped to 49.2 from -18.3 in July, reflecting a significant warming of bullish market sentiment.
Funds shifted toward low-valuation defensive sectors, and liquor-related ETFs rose against the trend. By the close, E Fund Baijiu ETF (03189) gained 1.09% to HK$1.114; on the A-share side, Penghua Liquor ETF (512690.SH) rose 0.72% to RMB 0.417. As the technology sector pulled back from highs and risk appetite contracted, funds turned toward low-valuation defensive areas. According to reports, positive signals not seen for some time have appeared in the baijiu distribution channel. According to distributors, wholesalers, and terminal retailers in Henan, Shandong, Guangdong, Anhui, and other places, channel inventory is still being digested overall, with inventory at some surveyed liquor merchants down about 10%-20% year on year; turnover of major single-product premium liquor brands is relatively fast, and inventory at some terminals has been kept at 1-2 months.
Institutional Views
Golden Eagle Fund noted that structurally, the technology growth sector has become the main direction of this round of adjustment, with some technology indices and core individual stocks successively breaking below important support zones formed in August and September, and the market shifting from previous trend trading to a game of existing funds or even shrinking funds. In addition, overseas technology assets have also shown signs of high-level adjustment, with the Philadelphia Semiconductor Index retreating from highs; the marginal cooling of overseas risk appetite further weakened the sentiment support for the domestic technology sector.
Charu Chanana, chief investment strategist at Saxo Bank in Singapore, said this round of selling in Asian markets is less a sudden deterioration in technology industry fundamentals than a repricing of the cost of capital. Investors are not questioning whether AI demand exists; what they increasingly question is how much they should pay for such growth when interest rates remain high, volatile, and possibly rise again.
ETF Developments
On October 15, three ETFs debuted on the Shenzhen Stock Exchange. Southern Value ETF (158043.SZ) listed on the Shenzhen Stock Exchange for the first time, falling 2.09% to RMB 0.983, with turnover of about RMB 97.7565 million. The product tracks the CNI Value 100 Index, focusing on value-oriented blue chips with low valuations and high dividends. Yongying Grain ETF (158047.SZ) listed on the Shenzhen Stock Exchange for the first time, falling 3.91% to RMB 0.958, with turnover of about RMB 40.5672 million. The product tracks the CNI Grain Industry Index, covering the entire grain industry chain and emphasizing planting and agrochemical segments. Bosera Robot ETF (158037.SZ) listed on the Shenzhen Stock Exchange for the first time, falling 1.96% to RMB 0.950, with turnover of about RMB 57.1027 million. The product tracks the CSI Robot Index, focusing on robot bodies, core components, and system integration segments.
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