Hong Kong stocks opened lower and drifted down on the first trading day after the Chung Yeung Festival holiday, with the Hang Seng Index once again falling below the 24,000 mark.
At the close, the Hang Seng Index stood at 23,867.74 points, down 319.09 points or 1.32%; the Hang Seng China Enterprises Index was at 8,030.26 points, down 1.21%; and the Hang Seng Tech Index was at 4,045.91 points, down 1.52%.
Soochow Securities noted that the weakness in Hong Kong stocks was mainly due to rebounding U.S. inflation, which reinforced market expectations of "higher for longer" interest rates, as well as adjustments in overseas tech stocks that dragged Hong Kong equities down. The Hang Seng Tech Index has essentially returned to levels seen around the "924" policy announcement. In theory, this could trigger short covering, but fundamental support at the current level remains weak, compounded by repeated overseas risk disturbances. As such, the rebound momentum for Hang Seng Tech may be limited, and a cautious observation stance on Hong Kong stocks is warranted.
Blue Chip Performance
Hansoh Pharma (03692) led gains among blue chips. At the close, it rose 8.32% to HK$34.38, with turnover of HK$1.208 billion. Hansoh Pharma announced another multi-project ADC strategic collaboration with Roche, with upfront and first-anniversary payments totaling US$510 million and potential milestone payments exceeding US$15 billion. The deal size ranks among the top tier of outbound licensing deals for domestic innovative drugs.
Among other blue chips, Sunny Optical Technology (02382) rose 4.51% to HK$60.3, while WuXi Biologics (02269) gained 3.84% to HK$50.05. On the downside, China Molybdenum (03993) fell 6.64%, and CATL (03750) dropped 6.58%.
Hot Sectors
In market trading, most large-cap tech stocks declined, with Tencent Holdings falling 1.77% and Alibaba dropping 3.58%. Multiple positive catalysts from home and abroad drove an against-the-trend surge in physical AI and robotics concepts, while edge AI concepts also stirred collectively. Innovative drug stocks advanced, with Hansoh Pharma surging over 8% after securing a major BD deal. The Double 11 shopping festival catalysed cosmetics stocks, with Linqingxuan rising nearly 10%. On the other hand, lithium battery stocks tumbled, with CATL hitting a more than one-year low after JPMorgan cut its target price. Non-ferrous metals, insurance, and mainland property stocks also declined.
Multiple positive developments ignited physical AI, with edge AI concepts stirring in tandem. At the close, 51WORLD (06651) rose 22.25% to HK$50; Hesai-W (02525) gained 10.68% to HK$14.3; UBTECH Robotics (09880) rose 6.04% to HK$68.45; Fibocom (00638) surged 14.01%; and Meig Smart (03268) advanced 7.7%.
The physical AI sector welcomed multiple catalysts. Nvidia's GTC Berlin conference was held from October 20 to 22, with physical AI, industrial AI, and robotics technology listed as core topics. On October 22, Unitree will host the 2026 World Physical AI Conference. Tesla will also hold its Q3 earnings call this Thursday, having previously stated in writing for the first time in its annual shareholder meeting materials that it is "prepared for mass production of V3 Optimus." On the domestic policy front, the Ministry of Commerce and eight other departments issued a document explicitly promoting the implementation of embodied intelligence technology in commercial logistics and other scenarios, while the State Administration for Market Regulation approved and released the first batch of six national standards for humanoid robots.
On the edge AI front, Counterpoint estimates that the global penetration rate of generative AI phones will reach 52% by 2027, with edge AI transitioning from a high-end selling point to a standard出厂 feature. Gartner data shows that AI PC shipment share will jump from 15.6% in 2024 to approximately 54.7% in 2026, and AI PCs are expected to become the norm by 2029.
Innovative drug stocks advanced against the trend. At the close, Lepu Biopharma-B (02157) rose 10.37% to HK$3.885; Keymed Bio-B (02162) gained 5.67% to HK$86.6; and Everest Medicines (01952) rose 4.45% to HK$33.8. The 2026 European Society for Medical Oncology (ESMO) Congress will be held in Madrid from October 23 to 27. A total of 29 Chinese innovative drug studies were selected as Late-Breaking Abstracts (LBA), accounting for about one-third of all LBAs, with five of them featured in presidential symposiums. Zuo Gang, Deputy Director of the Comprehensive Department of the National Development and Reform Commission, stated that outbound technology licensing for innovative drugs reached approximately US$130 billion in the first three quarters, close to the full-year total of last year. China Merchants Securities believes investors should focus on ESMO data catalysts and Q3 earnings, and is bullish on the innovative drug supply chain and earnings realization directions.
Lithium battery stocks fell collectively. At the close, CALB (03931) dropped 9.21% to HK$14, and CATL (03750) fell 6.58% to HK$411.8. JPMorgan downgraded CATL's Hong Kong shares from "Overweight" to "Neutral," cutting the target price from HK$725 per share to HK$500 per share, while maintaining its "Overweight" rating on CATL's A-shares. The report noted that downstream automakers, already under profit pressure, must also contend with battery consumption taxes, reduced export VAT rebate rates, and increasing trade barriers, making them more cautious about cost control. This will cause automakers to pass on a considerable portion of this burden to upstream industries and broader supply chain segments. The bank emphasized that this is not merely a traditional price war, but a redistribution of profits.
Gold and other non-ferrous metal stocks led declines. At the close, Zijin Gold International (02259) fell 9.30% to HK$134.6; China Molybdenum (03993) dropped 6.64% to HK$13.64; and China Gold International (02099) declined 5.79% to HK$201.6. The euro weakened amid escalating fiscal concerns and political turmoil in France, providing additional support for the U.S. dollar, while precious metals were suppressed by the rebound in the dollar index. CITIC Futures believes gold will remain range-bound in the short term. Growing concerns about growth combined with eased market pricing of a Fed rate hike in October provide solid support for gold's floor, while expectations of another rate hike within the year continue to cap the trend. Future upside drivers to watch include: if geopolitical conflicts ease significantly or negative feedback from high interest rates further emerges, rate expectations may see a trend inflection point; and if U.S. debt credit risks amplify in the fourth quarter with the new fiscal year and midterm elections, this could also provide upside drivers.
Notable Stock Movers
TCL Electronics (01070) issued a positive profit alert. At the close, it rose 6.63% to HK$17.36. TCL Electronics released a positive profit forecast on October 19, expecting revenue of approximately HK$91 billion to HK$97.7 billion for the first three quarters, a year-on-year increase of about 10% to 18%; adjusted net profit attributable to shareholders of approximately HK$2.11 billion to HK$2.25 billion, a year-on-year increase of about 45% to 55%. The growth was mainly driven by the dual-wheel strategy of "globalization" and "mid-to-high-end positioning."
Dekon Agriculture & Animal Husbandry (02419) drew attention for its cost advantages. At the close, it rose 3.04% to HK$55.85. According to institutional research data, Dekon Agriculture & Animal Husbandry's complete cost for commercial pigs fell to approximately 11.6 yuan/kg in September 2026, with cost management continuing to rank among the industry's best. The company relies on production process optimization and refined operations to further consolidate its cost reduction and efficiency gains, with expectations for further cost reductions ahead.
Gpixel (03277) was dragged down by lock-up expiry. At the close, it fell 15.49% to HK$47.2. The six-month lock-up period for shares held by Gpixel's cornerstone investors expired on October 16. On October 17, a total of 32.6452 million restricted shares of Gpixel officially became unlocked, representing approximately 50% of the global offering and 7.3% of total share capital of approximately 445 million shares.
COSCO Shipping Energy Transportation (01138) extended its decline. At the close, it fell 4.89% to HK$17.13. U.S. Energy Secretary Chris Wright stated that the Trump administration is authorizing the sale of some sanctioned tankers, planning to convert these vessels to legal operations through refurbishment and approval procedures to transport unsanctioned crude oil. The U.S. hopes to expand the available tanker fleet and alleviate transportation disruptions caused by the Iran conflict and obstructions in the Strait of Hormuz.
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