The Hang Seng Index opened 0.33% lower, while the Hang Seng Tech Index fell by 0.7%. Technology stocks trended downwards.
In contrast, the optical communications sector showed strength. Cambridge Industries Group saw gains of nearly 5%, Yangtze Optical Fibre and Cable rose close to 4%, and Wai Kee Holdings advanced over 2%.
Market Outlook and Analyst Perspectives
Regarding the future trajectory of the Hong Kong market, Soochow Securities suggests that the spillover effect from the overseas technology rally could potentially resonate with Hong Kong stocks. The current uptrend in global tech is expanding from AI hardware to upstream application software and mid-to-downstream segments. A key reason for the Hong Kong market's previous underperformance compared to US, South Korean, and Japanese markets was the relatively low market capitalization weight of AI hardware-related stocks in Hong Kong, limiting their contribution to the index. If the US tech rally continues to spread to mid and downstream sectors, Hong Kong stocks, which have a significantly higher market weight in AI applications, software, and related infrastructure, could see a stronger rebound.
Bocom International anticipates a shift in the macroeconomic narrative entering the second half of the year, moving from "AI-driven low-inflation growth" to "structural adjustments under re-inflation." The firm believes the Hong Kong market has a foundation for further upward movement. Against a backdrop of a global re-inflation cycle, corporate earnings recovery, and the convergence of catalysts from the AI industry narrative and domestic substitution, both the Hang Seng Index and the Hang Seng Tech Index are seen as having room for further gains.
Everbright Securities holds the view that while a bottom area has emerged, the timing for a full market reversal is not yet at hand. The market has largely priced in negative factors, with inflows from overseas passive funds and sustained southbound capital providing a solid value floor for the Hong Kong market. However, active foreign capital representing global long-term investors has not yet returned on a large scale, leaving the market lacking the most crucial driver for a sustained trend. The strength of China's economic recovery and the sustainability of corporate earnings still require further data validation. Currently, the Hong Kong market, particularly the Hang Seng Tech Index, is in a complex phase of bottom-building.
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