HK Stock Barometer: Hang Seng Rebounds Led by Tech Stocks, NEV Policy Fuels Market Enthusiasm
On July 28, 2026, the Hong Kong stock market staged a strong rebound, with the Hang Seng Index closing up 1.2% at 22,580 points, reclaiming the 22,500 mark. Tech stocks and new energy vehicle sectors led the rally, with active trading and turnover surging to HK$150 billion. Analysts noted that recent favorable mainland policies coupled with improved overseas risk appetite helped lift Hong Kong stocks from their lows, but sustained recovery requires fundamental support.
Tech Stocks Surge, Internet Giants Lead
The Hang Seng Tech Index soared 2.5% today, with nearly all constituents rising. Alibaba (09988.HK) closed up 4.2%, Tencent (00700.HK) up 3.8%, Meituan-W (03690.HK) up 5.1%, and Kuaishou-W (01024.HK) up 6.3%. Market rumors suggest Alibaba's cloud business secured large government orders, boosting investor confidence, while Tencent benefited from rumors of accelerated game license approvals.
The strong performance of the tech sector was closely tied to capital inflows. According to Wind data, southbound capital saw net inflows of over HK$8 billion today, primarily buying into leaders like Tencent and Meituan. A recent Goldman Sachs report noted that Chinese internet companies are undervalued historically with clear earnings recovery trends, recommending overweight positions. Additionally, US inflation data came in below expectations, easing rate hike concerns and supporting overseas capital flows back to emerging markets.
New Energy Vehicle Sector Booms, Policy Support Continues
The new energy vehicle sector performed strongly today, with BYD (01211.HK) rising 7.2% to a three-month high; NIO-SW (09866.HK) up 8.5%; and XPeng-W (09868.HK) up 6.9%. News-wise, the State Council today issued the "Several Measures to Further Expand New Energy Vehicle Consumption," proposing to exempt NEVs from purchase tax by end of 2026 and support charging infrastructure. The policy exceeded market expectations, directly triggering a sector surge.
Furthermore, BYD announced a breakthrough in solid-state battery technology, increasing energy density by 30%, with mass production planned for Q4. This news further ignited market enthusiasm, making BYD the focus of intraday capital flows. Analysts believe that under the dual drive of policy and technology, the Hong Kong NEV sector is likely to continue its uptrend.
Market Outlook: Can the Rebound Last?
Despite today's upbeat sentiment, investors remain concerned about geopolitical risks and earnings season uncertainty. The Hang Seng Index has rebounded about 8% from its June low, but trading volume has not significantly expanded, indicating limited incremental capital. Morgan Stanley strategists say the short-term rebound may continue but awaits Q2 earnings to confirm profit improvement.
In terms of sector allocation, the firm recommends focusing on consumption recovery and new energy related plays. Separately, the Hong Kong SAR Government today announced plans to optimize listing mechanisms, lowering barriers for new economy companies, which is expected to attract more quality firms to list in Hong Kong, providing long-term liquidity support.
Overall, Hong Kong stocks are likely to continue recovering in the short term driven by policy and capital, but medium-term focus remains on the Fed's interest rate path and China's economic recovery pace. Investors can accumulate tech and NEV leaders on dips while managing positions to avoid volatility.
