Index: Black Thursday
Let's start with the hard numbers. At the close on Thursday, October 22, 2026, the Hang Seng Index stood at 22,934.68 points, plunging 717.19 points, or 3.03%. It opened at 23,513 today, which was also the day's high, then fell in a one-way decline, hitting a low of 22,879 and closing at 22,934, almost exactly at the day's lowest point.
The Hang Seng Tech Index fared even worse, closing at 3,793.93 points, down 200.84 points, or 5.03%. What does that decline mean? The Hang Seng Tech Index has now fallen below 3,800 points, directly back to where it stood when the rally began on September 24, 2024. In other words, all the gains in tech stocks over the past two years have been wiped out in this one week.
Main board turnover reached HK$256 billion, nearly HK$80 billion more than yesterday's HK$176.6 billion. This is a classic case of panic selling on heavy volume. Nearly all Hang Seng Index constituent stocks fell. The Hang Seng Index now trades at a price-to-earnings ratio of 10.09 times, with a total market capitalization of HK$41.5 trillion.
Why it fell: resonance with the A-share market and a full-scale pullback in AI trades
Today's plunge in Hong Kong stocks was completely in sync with the A-share market. On the A-share side, the ChiNext Index fell 4.37%, while in Hong Kong the Hang Seng Tech Index fell 5.03%. Both markets were selling off the same things—new energy heavyweights and AI computing power.
The first drag came from internet giants. The two largest internet companies in Hong Kong both continued to fall sharply today, with one dropping below HK$380 and the other below HK$100. These two are the largest weights in the Hang Seng Tech Index, and their declines dragged the index down by several points. One of them had already hit a new low for the year yesterday and continued to break down today, with no signal of stabilization.
The second drag came from optical communications and AI hardware. The optical communications leader fell nearly 12%, another optical module leader dropped more than 7%, and another optical communications name fell more than 11%. This is exactly the same sector-wide linkage as the 12% drop in optical module leaders on the A-share side. Concerns about AI capital expenditure, triggered by the bond crisis at overseas AI companies, are flaring up simultaneously in Hong Kong and A-shares. The semiconductor sector also collapsed, with a PC supply chain leader falling nearly 11% and a wafer foundry name dropping more than 9%. Hot AI hardware stocks have cumulatively fallen more than 30% over the past two weeks, and southbound capital is accelerating its selling of semiconductor names.
The third drag came from lithium batteries. The Hong Kong-listed battery leader fell more than 7% again, and another power battery maker dropped more than 4%. On the A-share side, the battery leader fell 12% yesterday and another 3% in early trading today, with H-shares following suit. The new energy chain in Hong Kong and A-shares shares the same beta.
Sectors: an almost across-the-board collapse
Just how bad were Hong Kong's sectors today? Nearly all Hang Seng Index constituent stocks fell.
Optical communications, semiconductors, lithium batteries, tech stocks, and property were all falling. The property sector fell an average of 1.8%. In a systemic selloff like this, almost no sector can escape unscathed. This is not sector rotation; it is a full-scale retreat.
Southbound capital: from supporting the market to selling
One important change deserves attention here. Yesterday, southbound capital recorded net selling of HK$4.4 billion. Today, amid the Hong Kong market rout, market flows indicate that southbound capital is accelerating its selling of semiconductor and AI hardware hot stocks. Previously popular AI hardware names are being continuously sold off by southbound capital.
This signal is more important than the index decline. If southbound capital shifts from "buying more as prices fall" to "selling more as prices fall," then Hong Kong stocks will have lost their most important source of bullish support. Of course, the exact net buying figure for southbound capital on this crash day will only be known after the post-close data is released, but judging from sector fund flows, it is clear that mainland capital is selling AI and semiconductor names.
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