On July 28, 2026, Hong Kong stocks experienced early morning volatility before staging a strong V-shaped rebound in the afternoon, led by tech stocks. At close, the Hang Seng Index rose 1.35% to 22,045 points, regaining the 22,000-point mark; the Hang Seng Tech Index expanded its gains to 2.8%, closing at 4,850 points. Total market turnover significantly increased to HK$185 billion, indicating a recovery in market sentiment.
Tech stocks surge across the board; Tencent and Alibaba lead gains
The tech sector was the main driver of today's rebound. Tencent Holdings (00700.HK) rose over 4% in the afternoon before closing up 3.8% at HK$428, hitting a one-month high; Alibaba (09988.HK) gained 3.5%, Meituan (03690.HK) rose 4.2%; Bilibili (09626.HK) surged over 6%. Analysts pointed out that the recent release of positive signals regarding platform economy regulation in the mainland, combined with improved expectations for second-quarter earnings, has accelerated capital flows into oversold tech stocks.
The semiconductor sector also strengthened, with SMIC (00981.HK) up 2.6% and Hua Hong Semiconductor (01347.HK) up 3.1%. On the news front, the latest data from the Semiconductor Equipment and Materials International (SEMI) showed that global semiconductor equipment sales are expected to grow 12% year-on-year in 2026, with the Chinese market leading the growth globally.
Southbound funds net buy over HK$10 billion; expectations for favorable policies intensify
On the capital front, Southbound funds recorded a net purchase of HK$10.5 billion today, with the Shanghai Connect buying HK$6.8 billion and the Shenzhen Connect buying HK$3.7 billion. Since mid-July, Southbound funds have had net purchases for 11 consecutive trading days, with cumulative inflows exceeding HK$80 billion. The market generally believes that expectations of intensified domestic economic stabilization policies and the stabilization of the RMB exchange rate are the main reasons attracting mainland capital to deploy in Hong Kong stocks.
According to the China Securities Journal, the State Council executive meeting recently reviewed and approved the "Several Measures to Further Optimize the Business Environment and Stimulate Market Vitality," which proposes to increase support for platform economy, technological innovation, and other fields. Analysts at CICC stated that the policy directly benefits new economy companies listed in Hong Kong, helping to restore investor confidence.
Hang Seng Index constituents diverge; consumer stocks under pressure
Although the index closed higher, sector rotation was evident. Consumer stocks performed weakly, with Hengan International (01044.HK) down 1.8% and China Mengniu Dairy (02319.HK) down 0.9%. Analysts noted that against the backdrop of recurring pandemic outbreaks and weak consumer willingness, essential consumer stocks face pressure on earnings growth. In addition, some real estate stocks continued to adjust, with Longfor Group (00960.HK) down 2.3% and Country Garden (02007.HK) down 0.5%.
Notably, the high-dividend sector in Hong Kong stocks once again attracted capital today. Cheung Kong Infrastructure (01038.HK) rose 0.4%, Hong Kong Telecom (06823.HK) rose 0.3%, and Guotai Junan International pointed out that in a downward interest rate cycle, high-dividend assets still have allocation value.
Outlook: Sustainability of short-term rebound remains to be verified
Regarding the outlook, multiple institutions believe that the short-term rebound in Hong Kong stocks may continue but with limited upside. A report from Morgan Stanley said the Hang Seng Index remains attractive at current valuation levels, but caution is needed against global liquidity tightening and geopolitical risks. UBS believes that tech stocks are the core driver of this rebound in Hong Kong stocks, and if corporate earnings continue to exceed expectations, the index could challenge 22,500 points.
From a technical perspective, the Hang Seng Index today formed a bullish candlestick with a long lower shadow, indicating strong support near the 22,000-point level. However, the index remains below its 250-day moving average (around 22,200 points), and whether it can break through effectively still requires observation of volume confirmation.
Overall, today's V-shaped rebound in Hong Kong stocks sent a positive signal, but confirmation of a market bottom still requires more policy implementation and economic data validation. Investors may consider buying quality growth stocks on dips while maintaining flexible positions to deal with uncertainties.
