Hong Kong Stocks Rise Over 1% at Midday; Tech Giants Tencent and Alibaba Lead Rally

Hong Kong stocks showed a volatile upward trend today, with the Hang Seng Index rising over 1% at midday, as the tech sector became the core force driving the market rebound. Heavyweights such as Tencent Holdings and Alibaba were active, lifting the Hang Seng Tech Index, and market sentiment improved notably compared with the previous sessions.

Hang Seng Rebounds at Midday; Tech Heavyweights Lead Gains

As of the midday close, the Hang Seng Index stood near the upper end of its recent range, up about 1.2%. From the market perspective, tech stocks were the absolute main driver of today's session. Tencent Holdings rose more than 2% intraday, and Alibaba also gained nearly 2%, together contributing about one-third of the Hang Seng's advance. In addition, internet leaders such as Meituan and JD.com also strengthened, pushing the Hang Seng Tech Index up more than 1.5% at midday.

Analysts pointed out that today's tech rebound was driven by two factors: first, the overnight performance of U.S. tech stocks was solid, with the Nasdaq closing higher, providing external support for Hong Kong tech stocks; second, some internet platform companies recently announced positive business developments, such as Tencent's breakthrough in game license approvals, while Alibaba continues to focus on cloud computing and AI businesses, improving market expectations for their earnings prospects.

Trading Volume Modestly Increases; Market Sentiment Edges Up

Today's half-day turnover increased compared with the same period yesterday. According to HKEX public data, the half-day main board turnover was around HK$60 billion, indicating a slight improvement in capital participation. However, overall turnover remained below the year-to-date average, suggesting that the market has not yet formed a broad bullish atmosphere, and the rebound is more driven by structural opportunities.

In terms of fund flows, southbound capital recorded a net inflow of about HK$2 billion at midday, with major additions concentrated in the tech and financial sectors. Among them, Tencent Holdings and Meituan saw the largest net purchases by southbound funds, while bank stocks such as HSBC Holdings saw small net sales. This divergence reflects a renewed preference among domestic investors for tech growth stocks, but their allocation to traditional value stocks remains cautious.

Market Sentiment and External Environment: Cautiously Optimistic

Despite today's decent rebound, the market remains cautious about the outlook. On one hand, the path of the Federal Reserve's monetary policy still carries uncertainty. Although the market generally expects a high probability of a rate cut in September, repeated inflation data could cause volatility. On the other hand, the pace of mainland China's economic recovery remains a key variable affecting the medium- and long-term trend of Hong Kong stocks. The recently released manufacturing PMI has been below the boom-bust line for two consecutive months, indicating that economic momentum still needs further policy support.

However, some institutional views suggest that Hong Kong stock valuations are already at historical lows, with the Hang Seng Index's P/E ratio below 9 times and price-to-book ratio around 1 time, offering a high margin of safety. As the interim earnings season approaches, some stocks with better-than-expected results are likely to drive sector rotation and provide support for the index.

Outlook: Focus on Volume Sustainability

In the short term, whether the Hang Seng Index can hold its current level and push higher depends on whether turnover can continue to expand. If afternoon turnover breaks above HK$120 billion, the sustainability of the rebound will be confirmed; otherwise, if volume shrinks, the index may return to a range-bound pattern. In terms of sectors, tech stocks remain the barometer of market sentiment, and the movements of Tencent and Alibaba significantly impact the Hang Seng Index. Investors should closely monitor their fundamental changes and external market fluctuations.

Overall, today's Hong Kong stocks showed characteristics of an oversold rebound, with tech heavyweights leading the gains and injecting positive signals into the market. However, the sustainability of the rebound still requires coordination between volume and the external environment. It is recommended that investors remain rational, focus on targets with high earnings certainty in the interim results, and pay attention to the impact of Fed policy moves and mainland economic data on market sentiment.