Hong Kong's Three Major Indices Surge, Market Sentiment Improves
On July 26, 2026, Hong Kong stock market staged a strong rebound. The Hang Seng Index opened 0.8% higher in early trade and continued to rise, closing up 1.5% at 22,980 points, approaching the 23,000-point mark. The H-Share Index rose 1.8% to 8,200 points, while the Red Chip Index gained 1.2% to 4,100 points. Trading was active, with main board turnover exceeding HK$150 billion, up nearly 20% from the previous day.
Tech Stocks Surge, Heavyweights Strengthen
The tech sector led today's rally. The Hang Seng Tech Index jumped 2.6% to 5,100 points. Among components, Alibaba (09988.HK) rose over 4%, Tencent (00700.HK) gained 3.5%, Meituan (03690.HK) added 2.8%, and JD.com (09618.HK) rose 3.2%. The mainland's release of a special policy supporting the digital economy, coupled with optimistic expectations for some tech companies' upcoming Q2 earnings reports, boosted investor confidence.
Additionally, SMIC (00981.HK) rose 2.5%, and Xiaomi (01810.HK) gained 1.9%. The semiconductor sector continued to attract funding, driven by the logic of domestic substitution.
Southbound Capital Net Buying Exceeds HK$8 Billion, Domestic Funds Accelerate Deployment
Southbound capital recorded a net purchase of HK$8.26 billion today, the largest single-day inflow in nearly a month. The Shanghai-Hong Kong Stock Connect saw net buying of HK$5.02 billion, while the Shenzhen-Hong Kong Stock Connect had net buying of HK$3.24 billion. Among individual stocks, tech leaders like Tencent, Meituan, and Xiaomi ranked top in net buying, totaling over HK$3 billion.
Analysts pointed out that marginal improvements in mainland economic data and frequent policy tailwinds have enhanced Hong Kong stocks' appeal. Meanwhile, Hong Kong stocks are undervalued globally with high dividend yields, increasing long-term capital allocation willingness.
Sector Rotation Evident, Consumer and Financial Stocks Follow
Apart from tech, the consumer sector also performed well. China Resources Beer (00291.HK) rose 2.3%, Mengniu Dairy (02319.HK) gained 1.8%, and Li Ning (02331.HK) added 2.1%. In the financial sector, AIA (01299.HK) rose 1.5%, and Hong Kong Exchanges and Clearing (00388.HK) gained 2.0%, benefiting from higher turnover and improved market sentiment.
The real estate sector showed divergence: Longfor Group (00960.HK) rose 1.2%, while Country Garden (02007.HK) edged down 0.3%. The market awaits more destocking policy implementation.
Outlook: Short-Term Rebound Expected, Watch External Risks
Looking ahead, Mr. Chen, Asia Pacific investment strategist, said that Hong Kong stocks are undergoing a technical rebound after overselling, coupled with policy benefits and capital inflows, and are expected to extend gains in the short term. However, attention should be paid to potential volatility from US inflation data and the Fed's rate meeting, as well as global geopolitical risks. He advised investors to buy high-quality tech stocks and high-dividend state-owned enterprises on dips.
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