The Hang Seng Index has staged a sharp recovery, climbing nearly 14% from its 2025 low to trade around 25,623. This rally stands in stark contrast to the performance of its major Asian peers, the Kospi and Nikkei 225, which have tumbled approximately 15% and 40% from their respective yearly highs.
Tech Rout Hits South Korea and Japan
The sell-off in the Kospi and Nikkei 225 has been concentrated in semiconductor and memory stocks. In South Korea, shares of Samsung Electronics and SK Hynix have plunged over 45% and 55% from their year-to-date peaks. Similarly, Japanese tech heavyweights such as Kioxia, Softbank, Tokyo Electron, and Advantest have suffered steep losses as the artificial intelligence trade unwinds. For more on the broader tech rout, see our coverage of the Kospi tumbling 11% and Nikkei sliding 3% as AI hype collides with earnings reality.
Rotation into Chinese Tech
Investors are increasingly rotating capital into Chinese technology companies that have underperformed in recent months. Names like Alibaba, Meituan, and Xiaomi are now seen as bargains after prolonged weakness. The rotation is also fueled by expectations of fresh stimulus from Beijing after disappointing macroeconomic data. China's GDP expanded by just 4.3% in the last quarter, its slowest pace in years.
China's progress in artificial intelligence is another catalyst. Apple has selected Alibaba's Qwen model to power its AI initiatives, while Moonshot's Kimi K3 has emerged as a leading global AI model. In the memory sector, CXMT has become a standout, with its stock surging over 500% upon its Hong Kong listing.
Top Hang Seng Performers
Xiaomi has led the charge, rising over 45% in the past month as dip buyers stepped in. Despite the rebound, the stock remains well below its all-time high due to stalled growth and compressed margins from rising memory costs. Meituan has soared more than 37% over the same period, making it the best-performing Hang Seng constituent, even as price wars in food delivery persist. Other major names such as Li Auto, Trip.com, BYD, and Tencent have also posted double-digit gains in recent days.
Beyond tech, companies like CSPC Pharmaceuticals, JD Logistics, JD Health, Tingyi, Orient Pharmaceuticals, and Sino Biopharmaceuticals have bounced back. Only four Hang Seng components—Laopu Gold, Semiconductor Manufacturing International, Sunny Optical, and Lenovo Group—have declined over the past month.
Technical Outlook
The Hang Seng Index has broken above its 200-day moving average and the Major S/R pivot point, signaling bullish momentum. It is now approaching the strong pivot reverse level near 26,000. If the rotation from other Asian indices continues, the index could test that level in the near term. For context on the broader regional weakness, see our analysis of the Nikkei 225 and Kospi plunging as the tech rout deepens ahead of key earnings.
This article is for informational purposes only and does not constitute financial advice.
