Hang Seng Stagnant as AI-Related Stocks Weigh on Market

The Hang Seng Index remained largely stagnant, hovering around the 23,057 level during Monday’s trading session. Investors weighed the decline in oil prices against concerns regarding high valuations in the technology sector and the outlook for China’s economic growth, resulting in limited movement for the Hong Kong stock market.

Brent crude oil prices fell by approximately 1% to US$115.48 per barrel, amid diplomatic efforts to ease tensions in the Middle East. The drop in energy costs provided some support to market sentiment, as it could help alleviate inflationary pressures and reduce corporate operating expenses.

However, technology stocks remained under pressure due to skepticism regarding whether massive investments in artificial intelligence (AI) would yield commensurate returns. Investors are also awaiting earnings reports from Alphabet, Microsoft, and Amazon this week, hoping for a clearer picture of the business prospects for AI.

On the corporate front, Meituan plans to issue renminbi-denominated senior notes to refinance its offshore debt, while China Hongqiao has repurchased over 24 million shares, valued at HK$450 million. Meanwhile, Zijin Mining reported a 51.9% year-on-year increase in net profit, reaching RMB 57.53 billion for the first nine months of the year.

Looking ahead, investors are closely monitoring China’s Fifth Plenary Session, September industrial profit data, and October’s Purchasing Managers' Index (PMI) for clues regarding the direction of the economy and government policy. Shares of Z.AI fell 3.3%, MiniMax plunged 7.2%, and SMIC weakened by 3.8%, while Tencent managed to gain approximately 1%.