Hong Kong’s benchmark index dropped 0.83% on August 12, while the Hang Seng TECH Index slipped 0.99%. Internet and tech stocks mostly declined, with Tencent Music falling approximately 13%, NetEase down about 5%, Bilibili dropping roughly 3%, Alibaba and JD.com both losing around 3%, and Tencent sliding nearly 2%.
In contrast, property stocks posted strong gains. SUNAC rose about 9%, and COUNTRY GARDEN advanced roughly 5% as the sector rallied on improving sentiment. Chip stocks also moved higher, with GigaDevice surging over 5% and SMIC climbing more than 3%, driven by renewed interest in semiconductor names.
Outlook Points to AI and Tech as Key Drivers
Guotai Junan Asset Management noted that the Hang Seng TECH Index has corrected 31% from its October 2025 peak, suggesting that pessimistic expectations have been fully priced in. The index is now in a configuration window offering “medium-high reward with high probability of success,” making it an attractive entry point for investors.
Citigroup has upgraded its rating on Chinese equities to “overweight,” highlighting the current period as a key window for sustained market recovery. Morgan Stanley echoed this view, pointing to late July through August as a critical stretch for Hong Kong stock repair and reaffirming that now is a better time to increase exposure to the market.
CITIC Securities believes Chinese AI assets are poised for a revaluation, while Huatai-PineBridge Fund noted that the AI industry is transitioning from hardware competition to commercial monetization. The firm expects the market to focus more on the earnings potential of application-layer companies, and the Hang Seng TECH Index, which is closely tied to AI downstream applications, is likely to be among the first beneficiaries.
CICC remains bullish on the AI and tech growth theme but cautioned that a significant upward move for the tech sector still requires new catalysts to unlock demand, such as Anthropic’s breakthroughs in programming. The brokerage emphasized that while the long-term outlook is strong, near-term gains may depend on fresh triggers.
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