Hong Kong Market Midday Update: Major Indices in Decline, Tech and Internet Stocks Under Pressure, Optical Communications Sector Bucks the Trend

Hong Kong's three major stock indices all moved lower during the morning session.

As of the midday break, the Hang Seng Index had dropped 1.69% to 18,255.99, while the Hang Seng Tech Index fell 2.35%. The Hang Seng China Enterprises Index also declined by 2.1%.

Key Movers and Sectors

Technology and internet stocks were broadly lower.

Meituan-W (HKEX: 03690)

Meituan shares fell more than 6%.

Kuaishou-W (HKEX: 01024)

Kuaishou shares dropped over 5%.

Bilibili-W (HKEX: 09626)

Bilibili shares declined more than 4%.

JD-SW (HKEX: 09618)

JD.com shares were down over 3%.

TENCENT (HKEX: 00700)

Tencent shares fell more than 3%.

XIAOMI-W (HKEX: 01810)

Xiaomi shares also decreased by more than 3%.

In contrast, the optical communications sector defied the broader market downturn to post gains.

YOFC (HKEX: 06869)

Yangtze Optical Fibre and Cable Joint Stock Limited Company saw its share price surge more than 16%.

The rally in optical communication stocks follows a significant technological breakthrough.

A new low-loss, multi-core fiber optic cable line, jointly developed by several companies, has been launched, offering over five times the capacity of traditional cables and providing a new solution for AI computing interconnectivity.

Additionally, positive sentiment from overseas markets provided a boost.

Shares of U.S.-listed optical communications chip giant Marvell Technology (NASDAQ: MRVL) soared over 32% overnight.

Its CEO highlighted data center connectivity as the next major bottleneck for AI growth, while NVIDIA's (NASDAQ: NVDA) CEO publicly praised the company's potential.

Elsewhere in the market, new consumer concept stocks experienced a pullback, with shares related to Mixue Group falling over 5%.

Analysts suggest the consumer sector remains at a bottoming phase, with potential policy support and fundamental recovery expected to drive a revaluation.

Innovative drug concept shares weakened, with Wuxi XDC (HKEX: 02268) declining more than 5%.

Some brokerages remain optimistic about a potential rebound for the innovative drug sector and view related CRO/CDMO and upstream companies as having solid fundamentals and attractive valuations.

They also suggest looking at pharmaceutical companies transitioning into technology-related supply chains amid the ongoing tech market theme.