Solid Gold Berjangka – The Hang Seng Index closed 0.3% (or 74 points) higher at 24,345 on Tuesday (Oct 13), recovering from a sharp decline during morning trading. This rebound occurred even as technology stocks remained under pressure due to a global sell-off in artificial intelligence (AI)-related equities. Investors have begun to question high valuations and the potential returns on massive AI investments.
Market sentiment remains clouded by rising geopolitical tensions and Brent crude prices hovering around US$105 per barrel. High energy prices are fueling concerns about inflation and the likelihood of interest rates remaining elevated for an extended period. Such conditions pose a challenge for technology stocks, which are generally more sensitive to changes in interest rates and funding costs.
Amid the pressure on the tech sector, Tencent Holdings drew significant attention after its planned bond issuance attracted strong investor demand. Orders exceeded US$15.5 billion, far surpassing the minimum issuance target of US$4.5 billion. This robust demand indicates that investors still find major Chinese tech companies attractive, even as the market takes a more critical view of massive AI spending.
Several stocks helped bolster the Hang Seng's gains. Xiaomi rose 2.0%, AIA strengthened 2.0%, Meituan added 0.6%, and Geely surged 3.1%. However, investors remain focused on upcoming US inflation data and major corporate earnings reports, which could determine the direction of global markets—including Hong Kong tech stocks.
Newsmaker observes that the Hang Seng's rebound does not yet signal a definitive trend reversal. The index continues to face pressure from the global sell-off in AI stocks, high oil prices, and interest rate uncertainty. Should US inflation data come in hot, pressure on technology stocks could intensify. Conversely, lower inflation and solid earnings reports could provide room for the Hang Seng to continue its recovery.