Hong Kong Stocks Continue to Decline Amid Fears of AI Bubble and Uncertainty
Hong Kong stocks continued to face losses on Wednesday, following the weakness seen in Wall Street. This decline is attributed to growing concerns about a potential artificial intelligence (AI) bubble, along with uncertainty regarding the Federal Reserve’s rate-cut plans, which have dampened investor confidence.
At 11:20 am local time, the Hang Seng Index fell by 0.7% to 25,779.65, building on the previous day’s 0.8% loss. The Hang Seng Tech Index experienced a more significant drop, falling by 1.5%. On the mainland, the CSI 300 Index slipped by 0.1%, while the Shanghai Composite Index remained relatively stable.
Technology companies were among the biggest losers. E-commerce giant Alibaba Group Holding saw its shares drop by 1.7% to HK$156.30, while JD.com declined by 0.7% to HK$122.50. WeChat operator Tencent Holdings lost 0.5% to HK$626, and short-video platform Kuaishou Technology fell by 2% to HK$70. Electric-vehicle maker BYD also faced a sharp decline, dropping 2.4% to HK$94.80. Smartphone and carmaker Xiaomi eased by 1.3% to HK$42.784.
The losses mirrored a similar retreat in the US market overnight, where Palantir Technologies, a tech platform that integrates AI technologies, fell nearly 8% despite exceeding revenue expectations and raising its annual forecast. This decline raised questions about the sustainability of AI-driven gains and reinforced concerns about the ongoing tech-led downturn.
Stephen Innes, managing partner at SPI Asset Management, noted that traders were not panicking but showed a cautious tone. He highlighted that equity multiples had become stretched, and a 10 to 15% correction might be both tolerable and even beneficial.
Monetary policy uncertainty persisted after Fed governor Lisa Cook warned that a rate cut in December was not guaranteed. She emphasized that deteriorating labor market conditions now posed a greater risk than inflation.
Despite the overall decline, some stocks managed to limit their losses. Blind-box toymaker Pop Mart International rose 0.3% to HK$218, while food-delivery service provider Meituan advanced 1.3% to HK$101.20. Pharmaceutical maker WuXi AppTec added 1.7% to HK$101.90.
Two new stocks made their debut. Seres Group fell 3% to HK$127.60 in Hong Kong, while Suzhou Fengbei Biotech Stock surged by 186% to 69.98 yuan in Shanghai.
In other parts of the Asia-Pacific region, Japan’s Nikkei 225 dropped 4.7%, South Korea’s Kospi fell 3.1%, and Australia’s S&P/ASX 200 lost 0.3%.
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