On July 25, 2026, the Hong Kong stock market experienced a strong rally, with the Hang Seng Index closing up 1.2% at 28,150 points, successfully holding the 28,000-point threshold, hitting a three-month high. The technology sector was the absolute driver of this rally, with the Hang Seng Tech Index surging 2.5%, and multiple heavyweight stocks hitting record highs.
Tech Giants Explode
Meituan (3690.HK) closed up 4.3% at HK$285, hitting a new high since listing. JD.com (9618.HK) followed closely, gaining 3.8% to HK$298. Alibaba (9988.HK) also recorded a 2.9% increase, returning above HK$180. Analysts believe that the recent second-quarter earnings pre-announcements from these companies generally exceeded expectations, combined with signs of consumption recovery in the mainland, driving valuation recovery.
Tencent Holdings (0700.HK) rose 1.6% to HK$420. Although the gain was relatively modest, trading volume expanded to HK$12 billion, indicating increased attention from funds. Xiaomi Group (1810.HK) rose 2.1%, supported by positive smartphone shipment data.
Southbound Funds Continue to Increase
Data from the Stock Connect showed net southbound inflow of HK$8.5 billion that day, maintaining net buying for the 10th consecutive trading day. Among them, Meituan, Tencent, and Ping An of China (2318.HK) were at the top of net buying. Analysts from Guotai Junan International said that against the backdrop of loose monetary policy in the mainland, institutional investors tend to allocate undervalued tech leaders through Stock Connect, and this trend is expected to continue.
"After the Hang Seng Index broke 28,000 points, market confidence has significantly increased," the analyst added. "However, trading volume has not yet expanded significantly, indicating that some investors are still on the sidelines. Attention should be paid to changes in overseas interest rate policy in the future."
Sector Rotation and Risk Warning
In addition to tech stocks, the new energy sector also performed actively. BYD Co. (1211.HK) rose 2.5%, and Li Auto (2015.HK) rose 3.0%, benefiting from expectations of further increase in China's new energy vehicle penetration rate. Additionally, the pharmaceutical sector also rebounded, with WuXi Biologics (2269.HK) up 1.8%.
However, the financial sector showed divergence. ICBC (1398.HK) edged down 0.2%, and China Merchants Bank (3968.HK) was flat. Most real estate stocks came under pressure, with Hang Lung Properties (0101.HK) down 0.8%. Analysts pointed out that the rotation between tech stocks and cyclical stocks will continue, and investors should avoid chasing stocks with excessive short-term gains.
Institutional Outlook: Short-term Optimistic, Medium-term Risks
Goldman Sachs' latest research report upgraded Hong Kong stocks to "overweight," believing that valuations are at historical lows and earnings growth is expected to accelerate in the second half of the year. However, JPMorgan warned that if U.S. inflation data exceeds expectations, it could trigger a global liquidity tightening, and Hong Kong stocks may face a correction. It is recommended that investors focus on defensive sectors such as utilities and telecom operators.
Overall, in the short term, Hong Kong stocks are expected to fluctuate upward led by tech stocks, but the 28,000-point level still needs repeated confirmation. In terms of operation, investors can buy high-quality tech leaders on dips while allocating some high-dividend stocks to balance risk.
- Hang Seng Index: 28,150 points (+1.2%)
- Hang Seng Tech Index: 6,450 points (+2.5%)
- Net Southbound Inflow: HK$8.5 billion
Disclaimer: This article is for reference only and does not constitute investment advice. Investment carries risk, and participants should be cautious.
