Hong Kong shares fell on Wednesday, dragged down by losses in major technology stocks as investors turned cautious ahead of the reopening of mainland Chinese markets after an eight-day National Day holiday. The Hang Seng Index slipped 1.1%, paring earlier losses but still marking its third consecutive day of decline following a four-year high reached on October 2. Across Asia, risk-off sentiment prevailed, with the broader regional index down 0.7%, reflecting weak overnight performance on Wall Street and mounting investor concern over global economic headwinds.
Why It Matters
The downturn highlights renewed fragility in Hong Kong’s equity markets amid global uncertainty and rising geopolitical tensions. The Hang Seng Tech Index fell 1.1%, while the AI sector index declined 1.3%, as investors reacted to reports that U.S. lawmakers are urging broader bans on the sale of chipmaking tools to China an escalation that could further strain the technology supply chain. Major tech firms were hit hard: Alibaba fell 3%, while Baidu dropped 3.4%, extending a week of weakness for China’s digital giants.
Meanwhile, a 1.9% slide in mainland property developers, led by a 5.6% drop in Longfor, underscored persistent pressure on China’s real estate sector despite government support measures. The broader market retreat came as spot gold reached a record $4,000 per ounce, reflecting a flight to safety as global investors reassessed exposure to risk assets.
The sell-off was concentrated among major Chinese technology and property firms listed in Hong Kong. U.S. lawmakers’ calls for expanded semiconductor restrictions pose a direct challenge to companies such as Alibaba and Baidu, which depend on advanced chips for AI and cloud services. Developers including Longfor were also affected by investor skepticism over the recovery of China’s housing market.
Despite the downturn, analysts at Alpine Macro maintained that “the positive rerating is not over” for Chinese equities, citing both economic stabilization and expectations of improved diplomatic engagement between U.S. President Donald Trump and Chinese President Xi Jinping ahead of the APEC Summit later this month.
What’s Next
Mainland China’s financial markets are set to reopen on Thursday, offering investors fresh cues on domestic sentiment and economic momentum following the long holiday. Market watchers will closely monitor whether Beijing introduces new policy measures to support growth and stabilize investor confidence. In the short term, geopolitical developments and U.S.-China trade dynamics are likely to drive market direction, while sustained gains in gold suggest that risk aversion will continue to weigh on equities across the Asia-Pacific region.
With information from Reuters.
