The Hang Seng Index continues to underperform its global counterparts, with several of its largest components experiencing significant declines. On Thursday, the index fell to 23,963, its lowest level since July 8, and now sits more than 14% below its 2025 high. In contrast, the S&P 500 has reached record highs, highlighting the divergence in market performance.
Among the biggest drags, Sands China has dropped 20% over the past month, reflecting broader weakness in Macau-exposed casino operators. Laopu Gold has declined 18% as gold prices retreat amid rising U.S. Treasury yields, with the 10-year yield reaching levels not seen in over two decades. Haidilao International has also fallen 18%, mirroring pressure on global restaurant chains facing higher food and energy costs.
Semiconductor Manufacturing International Corp (SMIC) has been in a sustained downtrend, losing 15% in the last 30 days and 31% over three months, despite the ongoing artificial intelligence boom. Chinese electric vehicle makers BYD and Li Auto have also slumped amid intensifying competition and elevated operating costs, with peers Nio and XPeng experiencing similar declines.
Meituan continues to face headwinds from rising competition in food delivery, particularly from Alibaba and JD.com, which have stronger balance sheets. Xiaomi, often compared to Apple, has underperformed due to rising memory costs, as suppliers prioritize AI data center demand, squeezing margins. Its EV business also faces the same competitive pressures as BYD and Li Auto.
Despite the broad selloff, some constituents have held up well. Wuxi Biologics has gained 15%, while China Overseas Land, China Resources Power, and Lenovo Group have each risen over 5% in the same period.
Technical Outlook
The daily chart shows the Hang Seng Index trading below its 50-day and 100-day exponential moving averages, indicating persistent downward momentum. The index also remains beneath a descending trendline connecting highs from February, May, August, and September. The Average Directional Index (ADX) has climbed to 20.75, its highest since August 12, suggesting strengthening bearish trend.
Given these technical signals, the path of least resistance appears lower, with the next key support level at 23,000. A break below that could open the door to further declines.
This article is for informational purposes only and does not constitute financial advice.
