Hong Kong stocks kick off October with broad gains
Hong Kong’s equity market opened October on a strong note, with all three major indices rising on the first trading day. The Hang Seng Index climbed 1.61% to push past 27,000, while the Hang Seng Tech Index surged 3.54% to 6,682.86, striking a fresh four-year high not seen since November 2021. The rally was driven by gains across technology, semiconductors, and gold shares, highlighting a broad risk-on mood for Hong Kong equities.
Tech and semiconductors lead a sector-wide rally
The leadership of the rally came from technology-oriented names and semiconductor players. Leading gains included semiconductor giant SMIC, which jumped 12.70%, followed by a string of tech and internet-related big caps. Fast‑moving consumer platforms and AI-focused bets also contributed to the outperformance, with social media and search-oriented firms pacing the gains.
Selected movers
- SMIC +12.70%
- Kuaishou +8.57%
- Huahong Semiconductor +7.12%
- NIO +6.62%
- Baidu +4.50%
Meanwhile, the move in the Hang Seng Tech index reflected a broader narrative: valuations for China’s internet giants are converging toward global peers, according to market observers. Analysts note that domestic firms are intensifying AI investments, echoing a familiar pattern seen in global tech equities where short‑term profits may be pressured, but the price action is driven by the pace of AI development, models, and applications rather than immediate earnings.
AI investment and rate‑cut expectations shape sentiment
The October rally in Hong Kong coincides with renewed expectations that the U.S. Federal Reserve may begin another round of rate cuts. In the wake of softer payroll data in September and other indicators, market watchers increasingly price in a possible 25‑basis‑point cut in October. Futures markets and commentary from financial hubs point to a high probability of further easing later this year, with some measures suggesting the chances of a December cut remain elevated as well.
Gold and other cyclical plays keep momentum
Gold shares remained in demand amid a backdrop of rising bullion prices, with leading gold stocks rallying more than 14% in some cases. This move underlines a broader risk-off-to-risk-on rotation where precious metals act as a hedge and a barometer for global liquidity conditions. The fusion of AI optimism with commodity hedging creates a nuanced market mood that could sustain volatility while leaning upward as liquidity remains supportive.
Outlook and broker expectations
Analysts remain cautiously optimistic about Hong Kong’s trajectory in October. China Galaxy Securities argues that the A‑share and HK‑listed tech segments could benefit from ongoing policy support, intensified catalysts in the sector, and a relatively loose liquidity environment. The report suggests that while A‑share tech growth may offer more opportunities, the Hang Seng market benefits from its unique structure and external liquidity expectations, especially if the Fed delivers the anticipated rate cuts.
Everbright Securities echoes a constructive stance, noting that the overall profitability of the Hong Kong market remains solid and that internet, consumer, and innovative drug equities still offer attractive long‑term value. With continued AI development and a conducive rate‑cut cycle, the broker predicts a continued, though cautious, upward drift rather than a straight ascent.
Bottom line
The October start for Hong Kong stocks reflects a blend of AI-driven enthusiasm, improving rate‑cut expectations, and a resilient tech ecosystem. As investors weigh the near‑term impact of AI investments against potential earnings timing, the market could remain volatile but with a bias toward进一步的上行 if rate relief persists and global liquidity remains abundant.
(Source note: Guangzhou Daily Xinhuacheng)
