Today in the Hong Kong stock market, it’s tough out there! The Hang Seng Index opened at 26,900 points and continued to drop, with a loss of 287 points at midday. The atmosphere is quite gloomy. Especially for real estate and tech stocks, which have become the main areas for selling pressure, with declines so severe that even small stocks couldn’t escape. The Hang Seng Tech Index was even worse, dropping over 2%. Many usually strong tech blue chips like Baidu, SenseTime, and Alibaba fell more than 2%. Not even AI concept stocks were spared, with firms like GDS Holdings dropping over 7%. In brief, the tech sector today is seeing no survivors. What’s causing all this? It’s actually due to movements in the U.S. market. Recently, The Information reported that Oracle plans to spend heavily on Nvidia chips to rent to customers like OpenAI for cloud services. This raised concerns, causing Oracle’s stock to plummet, dragging down AI-related stocks and the Philadelphia Semiconductor Index, which in turn affected Hong Kong stocks. Furthermore, Oracle’s cloud business gross margin is just 14% compared to their average of 70%, which indeed raises eyebrows regarding industry risk. As for the real estate sector, they are also major losers today. Longfor Group led the decline, dropping over 8%, and developers seem to be struggling to cope. However, amidst the gloomy market, there are still bright spots. Changfeng Pharmaceuticals went public today and opened over 218% higher, focusing on respiratory medication and innovative therapies, becoming one of the few winners of the day, definitely a ‘shot in the arm’ for the market. Overall, with external atmosphere being poor, along with profit-taking and declines in both real estate and tech stocks, Hong Kong stocks are likely to test their lows again in the short term. For those trading in Hong Kong stocks, remember to fasten your seatbelt and tread carefully, avoid jumping into the market recklessly.
