Hang Seng Plunges 6% in a Week What’s Happening in Hong Kong?

The Hong Kong stock market weakened again during Friday’s trading session (October 23, 2026), with the Hang Seng Index falling 0.5% to around the 22,822 level. This decline extends the pressure following a sharp sell-off in the previous session. Concerns regarding the high level of investment and funding requirements for the artificial intelligence (AI) sector have made investors increasingly cautious—a sentiment compounded by a significant drop in technology stocks on Wall Street this past Thursday.

Pressure on the tech sector continues to mount as questions arise regarding companies' ability to generate profits from AI investments, which demand massive capital outlays. This has weighed on Hong Kong-listed tech stocks, including SMIC (down 3%), Lenovo (down 3.1%), and Genscript Biotech (plunging 9.7%). Meanwhile, shares of AIA corrected by 0.6%, and Wuxi Biologics fell 1.5%, indicating that the selling pressure extends beyond the technology sector.

Market sentiment has further deteriorated due to a surge in global oil prices, fueled by escalating geopolitical tensions in the Middle East. Brent crude reportedly jumped by approximately 4% to near US$114 per barrel after Houthi attacks on facilities in Saudi Arabia raised concerns over potential energy supply disruptions. Rising oil prices threaten to exacerbate global inflationary pressures and may prompt central banks to maintain tight monetary policies for longer, posing an additional challenge for the stock market.

From mainland China, the AI ​​startup DeepSeek has reportedly secured approximately US$15 billion in funding. While this news signals positive investor interest in the development of domestic AI technology, it has not been enough to offset broader concerns regarding the high valuations of tech stocks and the immense costs associated with AI development. Throughout this week, the Hang Seng has recorded a decline of more than 6%, reflecting waning investor appetite for risk assets.

Looking ahead, the Hang Seng’s performance is expected to remain influenced by conditions on Wall Street, oil price trends, and the investment outlook for China’s technology sector. Should concerns regarding AI financing and global inflationary pressures intensify, the index risks further weakness. Conversely, stronger corporate earnings reports or the emergence of supportive economic policies from China could help restore market sentiment. Investors are now focused on whether the Hang Seng can halt its decline or if it will face even greater pressure following a loss of over 6% this week.