NewTimeSpace | Hong Kong Market Close: Three Major Indices Pull Back Sharply; Hang Seng Index Ends Down 1.89%, with Durable Consumer Goods and Coal Themes Rising Against the Trend

NewTimeSpace reported, on August 24, 2026, Hong Kong's three major indices pulled back sharply. The Hang Seng Index fell 1.89%, the Hang Seng TECH Index dropped 3.61%, and the Hang Seng China Enterprises Index fell 1.89%. The Hang Seng Index's full-day total market turnover was HKD 291.2 billion, up from the previous trading day. Southbound funds recorded a net inflow of HKD 11.567 billion.

On the market front, by sector, themes such as durable consumer goods, coal, and oil & petrochemicals led the gains, while themes such as semiconductors, hardware equipment, and software services led the declines.

Among the Hang Seng Index constituents, 17 rose and 75 fell. On the downside, ALIBABA-W fell 8.54%, SMIC fell 7.93%, and HANSOH PHARMA fell 6.11%. On the upside, SINOPEC CORP rose 5.90%, POP MART rose 4.03%, and CHINAHONGQIAO rose 3.11%.

Among the Hang Seng TECH Index constituents, 2 rose and 28 fell. On the downside, Z.AI fell 10.81%, MINIMAX-W fell 10.08%, and HUA HONG GRACE fell 5.23%. On the upside, MIDEA GROUP rose 1.50% and LEAPMOTOR edged up 0.05%.

Among the Stock Connect (southbound) constituents, QUNABOX GROUP surged 19.11%, HIPINE surged 18.76%, and BRETON rose 9.82%. On the downside, HAICHANG HLDG plunged 15.87%, LIVZON PHARMA plunged 15.73%, and REFIRE plunged 13.50%.

HTSC pointed out that the market shows little divergence on how much the medium-term trend of Hong Kong stocks is affected by fundamentals, with the key variable lying in the global liquidity environment. We believe that the weakening of the US dollar amid challenges to its credibility and the strengthening of RMB appreciation will help further narrow the A-H premium of Hong Kong stocks and re-rate Hong Kong's financial assets. However, for the broader market, the backdrop of this round of US dollar weakness is not last year's globally loose financial conditions and risk-on environment, and the direction of a tight liquidity environment has not changed. Overseas 10-year US Treasury yields are likely to fluctuate at elevated levels; both renewed foreign-exchange intervention or a rate hike by the Japanese yen are possible, and the August central bank symposium is a key focus. Under Hong Kong's approach of raising short-end and controlling long-end rates overseas amid a weaker HKD exchange rate, HIBOR may rise further. As incremental liquidity support is hard to come by, the earnings season has not yet been fully priced in, making the degree of earnings realization all the more important.

In terms of allocation, we maintain a balanced stance: low-volatility high-dividend plays (such as banks) as the core position; watch for interim reports or confirmation of operating bottoms in dairy and some retail; position the AI chain (such as wafer foundry) as an offensive play, participating in oversold rebounds with a small position; CXO and innovative-drug leaders show high earnings realization but their short-term cost-effectiveness has declined, so the slope of the rally may moderate. (Source: HTSC, August 23, 2026, "Overseas Weekly: Hong Kong Financials and the A-H Premium Still Have Room to Improve")

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