Hong Kong's Hang Seng Index capped its worst first-half performance in recent years, sliding 10.7% as the benchmark breached the 23,000 level on the final trading day of the period.
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HSI closes below 23,000 as 1H26 losses reach 10.7%
The Hang Seng Index fell 0.63% to 22,881 on Monday, slipping below the 23,000 mark as the benchmark capped a 10.7% first-half decline.
"That gap between returns and flows fits a broader pattern across Asia's tech-heavy markets: strong performance is triggering rebalancing and profit-taking, not fresh institutional buying," said Geoff Yu, macro strategist at BNY.
The index touched a session low of 22,685 before paring losses, with full-day turnover reaching HKD 308.05 billion. The Hang Seng Tech Index bucked the broader trend, rising 1.8% to 4,472, while the Hang Seng China Enterprises Index fell 0.62% to 7,558. For the first half, the HSCEI lost 15.2% and the HSTECH dropped 18.9%.
Technology names led the session's gains. Lenovo Group (00992.HK) surged 8.18%, the best performer among blue chips, while Baidu (09888.HK) climbed 5.08% and Tencent Holdings (0700.HK) advanced 2.28%. NetEase (09999.HK), Kuaishou (01024.HK) and Meituan (03690.HK) each rose more than 1%. Alibaba Group (09988.HK) edged down 0.16%.
The energy sector dragged on the index. CNOOC (00883.HK) fell 3.61% and PetroChina (00857.HK) dropped 3.53% as Brent crude futures held near pre-war levels at $72.49 a barrel.
The 10.7% first-half decline marks a sharp reversal from the record-breaking momentum seen across other Asian markets. Japan's Nikkei 225 surged 1.6% on Tuesday, set for a quarterly gain of more than 38%, while South Korea's KOSPI rose 3%, extending a second-quarter rally of nearly 71%. The divergence highlights the pressure on Hong Kong from sustained foreign selling and a resurgent dollar, which pushed the yen to a four-decade low of 162.41 per dollar.
Tencent Buybacks Fail to Stem Selloff
Tencent has been ramping up share repurchases to support its stock, spending more than HK$9 billion ($1.1 billion) in June alone, the most for any month this year, according to Bloomberg calculations. The stock's valuation fell to 11.2 times one-year forward earnings, the lowest on record. Citigroup expects the pace of buybacks among Chinese internet companies to accelerate as firms seek to retain investors.
The dollar index rose 1.3% in the second quarter, driven by a repricing of U.S. interest rate expectations that has shifted from cuts to potential hikes. U.S. stock futures pointed to a mixed open, with S&P 500 futures down 0.5% and Nasdaq 100 futures sliding 1.1%, while Dow Jones futures edged 0.1% lower.
Investors now look to U.S. jobs data due Thursday and an appearance by Federal Reserve Chair Kevin Warsh on Wednesday for further cues on monetary policy.
This article is for informational purposes only and does not constitute investment advice.
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