Market closes higher as tech stocks lead the rally
Hong Kong’s equity market finished broadly higher on Tuesday, October 2, with the Hang Seng index gaining 1.61% to 27,287.12. The tech‑driven Hang Seng Tech Index surged 3.36% to 6,682.86, while the Mainland‑facing China Enterprises Index rose 1.77% to 9,724.38. The session reflected a broad appetite for technology plays and AI‑related growth, alongside segments such as semiconductors, gold stocks, and consumer electronics.
Tech names surge as AI investment theme deepens
Leading the gains in the technology sector were several heavyweight constituents. Semiconductor giant Semiconductor Manufacturing International Corporation (00981.HK) climbed 12.70%, followed by fast‑rising Kuaishou (01024.HK) up 8.57%, Baidu (09888.HK) up 4.50%, JD.com (09618.HK) up 3.10%, and Tencent (00700.HK) rising 2.04%. The broad strength in the tech index underscored investors’ belief that AI investment and related technology development could drive earnings growth in the medium term.
Analysts see valuations aligning with global peers amid AI push
Analysts from Guoxin Securities observed that HK internet giants are converging toward overseas valuations. Tencent and Meta, as well as Alibaba and Google, are now trading at comparable levels. The firm noted that domestic tech leaders appear to be entering a phase of intensified AI investment, similar to the mid‑2023 surge in capital expenditure led by Microsoft and Meta to accelerate AI capabilities. In this cycle, near‑term profits may be compressed by AI spending, but stock prices are increasingly driven by the pace of investment, model development, and real‑world applications.
Sector highlights: semiconductors, gold, and more
Beyond tech, several other sectors posted notable gains. In semiconductors, SMIC led with a 12.70% rise, while Hua Hong Semiconductor (01347.HK) advanced 7.12% and Shanghai Fudan University Static (01385.HK) gained 4.70%. A surge in AI server deployments has boosted memory and storage demand, with Morgan Stanley projecting the global high‑bandwidth memory (HBM) market to grow from about $3 billion in 2023 to roughly $53 billion by 2027. Domestic supply chains are expanding to meet this demand, unlocking new growth avenues for top chipmakers.
Gold stocks were among the day’s standout performers as bullion prices strengthened. Tongguan Gold (00340.HK) rose 15.13%, Zhongjia Gold International (02259.HK) gained 14.13%, and Lingbao Gold (03330.HK) climbed 10.86%. The move reflected a move higher in COMEX gold futures to fresh highs, with prices testing the $3,900 an ounce level as markets weighed inflation hedges against risk assets.
In the photovoltaic space, green energy names also attracted buyers. Xinyi Solar (00968.HK) rose 9.88%, Sun Energy (00757.HK) added 8.65%, and Folight Glass (06865.HK) advanced 6.25%. Industry commentary pointed to a price rebound in raw materials and continued demand for solar components as installers accelerate capacity and utility scale projects ahead of next year’s demand cycle.
Pharmaceuticals maintained momentum as investors looked to innovation and diversification in biologics and clinical development. WuXi Biologics‑linked entity (药明合联, 02268.HK) gained 7.15%, Junshi Biologics (01877.HK) rose 7.09%, and Tigermed (03347.HK) advanced 4.02%, underscoring a sector benefiting from renewed financing activity and global collaboration in biotech development.
Auto sector benefits from September gains in new energy vehicles
The autos group ended with gains as new energy vehicle makers reported strong September deliveries. NIO (09866.HK) climbed 6.62%, Leapmotor (09863.HK) gained 3.99%, and BYD (01211.HK) rose 3.36%, reflecting robust demand in China’s EV market and dealer confidence in ongoing product launches and supply chain stabilization.
Notable movers and AI‑driven catalysts
Among individual stocks, Kuaishou‑W jumped 8.57% to HK$91.85, after Artificial Analysis ranked Kuaishou’s 2.5 Turbo model (1080p) at the top of the global video generation model leaderboard, highlighting AI’s real‑world deployment potential. Another notable mover, Three‑Leaf Clover Biotech (02197.HK), surged more than 21% after announcing Phase I trial initiation for its respiratory vaccine candidates SCB‑1022 and SCB‑1033, signaling progress in biotech development and potential near‑term clinical milestones.
Outlook: AI investments, margins, and the path forward
Market observers expect the AI arms race to set the tone for the coming quarters. The AI investment cycle—particularly in hardware, software, and related services—could temper short‑term profits but sustain upside as models improve and use cases expand. The convergence of valuations with global peers, combined with a strong pipeline of AI initiatives at major technology groups, supports a constructive near‑term trajectory for HK equities that are exposed to AI, semiconductors, and cloud‑driven growth. Investors will be watching earnings prospects and how quickly margins can improve as new AI capabilities scale across businesses.
