- The Hang Seng Index and Hang Seng Tech Index in Hong Kong both fell to new lows, with heavyweight tech stocks under pressure, leading to continued market pessimism.
- The semiconductor sector in South Korea experienced a sharp decline, causing a ripple effect that led to a significant pullback in the memory semiconductor industry chain, which had been rising recently.
- Innovative pharmaceutical stocks and domestic bank stocks were active against the trend, strengthening in certain areas due to defensive capital inflows, preventing further declines.
Tech Heavyweights Under Pressure
The Hong Kong stock market continued its downward trend on Tuesday morning. By midday, the Hang Seng Index had fallen by 1.13%, the China Enterprises Index by 1.20%, and the Hang Seng Tech Index by 2.21%, all hitting new recent lows. Market trading volume was limited, with a strong sense of caution among investors. Heavyweight tech stocks were the main force dragging down the market, with JD.com dropping nearly 5%, Xiaomi falling almost 4%, and both Tencent Holdings and Meituan declining by 3.6%, while Alibaba fell nearly 3%. The valuations of large internet companies have once again approached their recent lows, reflecting a temporary weakening in offshore capital's willingness to allocate to growth assets.
Semiconductor Sector Resonates with Pullback
In addition to tech internet giants, the previously strong semiconductor sector also saw significant profit-taking. The external sentiment spillover from the sharp decline in South Korean chip stocks in the Asia-Pacific market affected Hong Kong's memory semiconductor stocks, leading to a broad and significant pullback, with accumulated profits from earlier gains being realized. Meanwhile, gold stocks and real estate stocks also remained weak, continuing to suppress the recovery momentum of cyclical sectors. Market analysis indicates that the volatility of overseas tech stocks has directly pressured the valuation of Hong Kong's tech semiconductor sector.
Safe-Haven Funds Flow to Defensive Sectors
Amid the overall market pressure, defensive sectors showed some resilience. Most innovative pharmaceutical stocks were active against the trend, with related pharmaceutical stocks attracting capital allocation at low valuations. At the same time, most high-dividend domestic bank stocks rose, acting as a stabilizing force in the market. If the external macro environment remains uncertain, the trend of funds concentrating on low-valuation, high-dividend assets may continue.
