Hong Kong's three major indices retreated collectively on Tuesday as the Federal Reserve resumed its tightening cycle with a 25-basis-point rate hike, marking the first increase in over three years. The move came with a notably hawkish shift in the dot plot, while Fed Governor Waller characterized the decision as removing a "dose of accommodation" from monetary policy. The Hang Seng Index fell 0.44% or 109.49 points to close at 24,604.29, with total turnover reaching HK$185.586 billion. The Hang Seng China Enterprises Index slipped 0.38% to 8,175.36, while the Hang Seng Tech Index declined 0.34% to 4,310.74.
Looking ahead, Huatai Securities noted that with September's rate hike now settled, December could become the next major battleground for rate expectations. Whether the Fed embarks on a full tightening cycle will still require more economic data and official commentary to determine. Meanwhile, SPDB International previously suggested that even as the U.S. enters a rate-hiking phase, Hong Kong equity allocation can still adopt a barbell strategy under the C.A.S.T. framework. The growth end focuses on AI as the medium-term theme, extending into cloud applications and innovative drug overseas expansion, while the defensive end concentrates on central state-owned enterprise dividend plays and stable cash-flow assets.
Key Blue-Chip Movers
Weichai Power Co Ltd (02338) led blue-chip gains, climbing 5.35% to HK$31.14 with turnover of HK$1.174 billion. Citi Research highlighted that U.S. industrial generator leader Generac secured a long-term supply agreement with Amazon to provide backup generators for its data centers, with initial deliveries expected to total $2.4 billion between 2027 and 2028. The brokerage viewed this as a positive cross-read for Weichai, noting the company is a core supplier to Generac and stands to benefit from sustained order growth.
Other notable blue-chip performers included BYD Co Ltd (01211), which advanced 2.46% to HK$81.15, and Innovent Biologics Inc (01801), which rose 2.18% to HK$96.15. On the downside, Laopu Gold Co Ltd (06181) fell 3.04% to HK$363, while Zijin Mining Group Co Ltd (02899) dropped 1.63% to HK$33.86.
Sector Performance Overview
Internet and technology stocks largely came under pressure, with Tencent Holdings Ltd (00700) slipping 1.71% and Alibaba Group Holding Ltd (09988) declining 1.04%. The global AI-driven pharmaceutical industry is accelerating, with AI drug development and CRO concept stocks bucking the broader downturn to lead gains. GenScript Biotech Corp (01548) surged over 14% following its collaboration with Lilly's TuneLab platform. Domestic large model commercialization is also speeding up, with Zhipu AI (02513) raising its ARR guidance, lifting large model concept stocks. Fed's hawkish rate hike sent gold stocks tumbling across the board, while a stronger U.S. dollar weighed on commodity prices and pressured oil stocks. Semiconductor and PCB concept stocks, which had previously rallied strongly, also pulled back collectively.
AI Drug Development and CRO Stocks Rally Against the Trend
By market close, GenScript Biotech Corp (01548) soared 14.31% to HK$37.22, Metis Therapeutics-P (07666) jumped 12.7% to HK$15.53, Biocytogen Pharmaceuticals-B (02315) advanced 4.27% to HK$61.1, and Insilico Medicine (03696) climbed 6.86% to HK$53.75. Multiple catalysts are driving the AI drug development sector. GenScript announced a partnership with Lilly's AI/machine learning drug discovery platform, Lilly TuneLab™, to provide wet lab validation services for participating companies. Novo Nordisk also announced a collaboration with Anthropic to use its Claude Science platform to accelerate new drug discovery. Additionally, Anew Labs, an AI pharmaceutical company spun off from ByteDance, has completed a $290 million first-round financing.
Notably, U.S. drug experiment leader Twist Bioscience raised its forward guidance, projecting related orders of $25 million in 2025, $50 million in 2026, and as much as $100 million in 2027—doubling this year's figure. Industrial Securities commented that the sharp rally in CXO stocks stems from improved performance driven by demand-side changes, combined with valuation recovery, creating a "Davis Double Click" effect. AI for Science is an additional boost on top of this cycle, bringing incremental demand as major tech firms enter the space as new downstream demand sources, further amplifying demand for upstream services. China Merchants Securities believes AI drug development has entered the clinical validation stage and is poised for commercial explosion.
Large Model Concept Stocks Stay Active
At the close, MiniMax-W (00100) rose 7.06% to HK$254.8, while Zhipu AI (02513) gained 2.78% to HK$740. During an analyst and investor meeting on September 16, Zhipu revealed it has signed revenue-sharing agreements with multiple leading domestic and international cloud service providers, with related revenue recognition beginning in October. The collaboration model involves GLM series open-source models being offered as hosted API services on overseas cloud platforms. The company's full-business ARR has already reached $1.8 billion, and year-end ARR guidance was raised from $2.4 billion to $3 billion. Additionally, MiniMax's ARR surpassed $800 million in August, with enterprise users contributing over 80%.
Robot Concept Stocks Mostly Recover
By market close, Xian Gong Intelligent (06106) advanced 4.79% to HK$71.05, Johnson Electric Holdings Ltd (00179) gained 3.01% to HK$18.46, and Sanhua Intelligent Controls Co Ltd (02050) rose 2.61% to HK$24.4. Industry supply chain reports indicate that Tesla recently issued new orders of approximately 5,000 units to suppliers—the first thousand-unit scale mass production order following previous trial orders of several hundred units. Meanwhile, Tesla is accelerating factory audit work for its Optimus humanoid robot supply chain in China, visiting suppliers in Shanghai, Hangzhou, Ningbo, and Xiamen. The combination of factory audits and orders signals that Optimus has officially moved from engineering prototype to replicable manufacturing stage. On September 17, Unitree Robotics' stock price surged during intraday trading, with its total market value once again reclaiming the 200 billion yuan threshold.
Gold Stocks Weaken Across the Board
By the close, Shandong Gold Mining Co Ltd (01787) declined 5.21% to HK$23.3, Chifeng Jilong Gold Mining Co Ltd (06693) fell 4.82% to HK$37.48, and China Gold International Resources Corp Ltd (02099) dropped 3.82% to HK$246.8. The Fed's 25-basis-point rate hike lifted the federal funds rate target range to 3.75%-4.00%, the first increase since July 2023 and in line with market expectations. However, the hawkish dot plot and Waller's comments signaled that the tightening cycle is far from over. The latest dot plot shows 16 officials anticipate at least one more rate hike this year. Waller noted that U.S. inflation remains elevated, with little evidence that inflation trends are passing the test. Everbright Futures suggested that two key variables warrant attention going forward: the direction of subsequent Fed economic data, and whether long-end U.S. Treasury yields can retreat from elevated levels near 5%.
Notable Stock Movements
GAC Group Co Ltd (02238) rallied on heavy volume, surging 7.03% to HK$2.435. On September 14, GAC announced it had signed a Letter of Intent with China FAW Group Co Ltd to plan the acquisition of a portion of a joint venture vehicle company's equity held by FAW through a share issuance, along with raising matching funds. Preliminary calculations indicate that following the transaction, FAW would become GAC's second-largest shareholder with strategic influence.
COSCO Shipping Energy Transportation Co Ltd (01138) jumped 7.85% to HK$19.29. Driven by geopolitical risk premiums and tight supply-demand dynamics, VLCC freight rates continue to hit record highs. According to Baltic Exchange data, the cost to charter a Very Large Crude Carrier to ship 2 million barrels of crude from the U.S. Gulf Coast to China reached approximately $44.8 million as of Tuesday—an all-time high, up sharply from $39 million the previous day.
Fortior Technology Co Ltd (01304) rose 7.22% to HK$126.2 against the broader downtrend. The company announced its board believes the grant conditions for its 2026 restricted stock incentive plan have been satisfied, approving September 16 as the initial grant date. A total of 1.97 million restricted shares will be granted to 301 incentive recipients at a grant price of HK$100 per share. Zheshang Securities noted the incentive plan deeply ties in core business and technical talent, demonstrating confidence in the company's new business development.
Yangtze Optical Fibre and Cable Joint Stock Ltd (06869) continued its upward momentum, gaining 4.18% to HK$184.4. Corning's recently signed ten-year agreement with Verizon, combined with nearly 90% price increases in China Mobile's centralized procurement, further confirms the supply-demand landscape reversal in the optical fiber industry. Galaxy Securities noted the fiber optic industry is transitioning from a traditional telecommunications cyclical sector to a computing infrastructure track, with backbone network expansion and data center internal demand resonating together to unlock long-cycle structural growth opportunities.
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