Tencent's WeChat AI assistant news cools off; tech and biotech stocks drag down Hang Seng Index, erasing most of yesterday’s gains. Semiconductors outperform amid the downturn—consider iShares Asia Semiconductor ETF by E Fund.

Yesterday’s tech sector rally drove the Hang Seng Index up 640 points in a single day, but technical correction pressure emerged right at today’s open. Tech stocks gave back substantial gains, compounded by simultaneous weakness in biotech stocks, causing the Hang Seng Index to extend losses. At one point, it fell as much as 469 points, finally closing at 25,633, down 405 points or 1.6%, slipping below the 26,000 mark. Total market turnover reached HK$322.9 billion. The Hang Seng China Enterprises Index closed at 8,596, down 166 points or 1.9%. The Hang Seng Tech Index ended at 5,056, down 142 points or 2.7%. Southbound capital recorded its fifth consecutive day of net inflows, with net purchases totaling RMB 18.68 billion today.

Tech stocks erased nearly all of yesterday’s gains. During trading hours, domestic magazine Caijing quoted Tencent sources stating that the launch timing of WeChat’s AI agent still hinges on regulatory approval progress. Given WeChat’s user base of 1.4 billion, compliance procedures may be stricter than for other products, and no launch timeline can be confirmed. This news immediately dashed market optimism built up yesterday, triggering significant pullbacks in tech stocks. Tencent (0700) $TENCENT (00700.HK)$ fell HK$15.2 or 3.16%, closing at HK$466.4; Meituan (3690) $MEITUAN-W (03690.HK)$ Downgraded by CMB International with a lowered price target, it fell HK$5.10 or 5.97%, closing at HK$80.40; JD.com (9618) $JD-SW (09618.HK)$ Fell HK$5.00 or 4.16%, closing at HK$115.10; Alibaba (9988) $BABA-W (09988.HK)$ Fell HK$4.30 or 3.29%, closing at HK$126.60; Xiaomi (1810) $XIAOMI-W (01810.HK)$ Fell HK$1.04 or 3.51%, closing at HK$28.58; Kuaishou (1024), despite reports that its Koala AI is undergoing its first round of financing, still dropped HK$2.24 or 4.57%, closing at HK$46.74; Baidu (9888) $BIDU-SW (09888.HK)$ Fell HK$1.80 or 1.34%, closing at HK$132.90.

The annual meeting of the American Society of Clinical Oncology (ASCO) has just concluded, and coupled with foreign media reports that the U.S. plans to extend investment restrictions on China to the biotechnology sector, the entire biotech segment came under pressure. $WUXI BIO (02269.HK)$ Wuxi Bio (2269) fell HK$2.46 or 7%, closing at HK$32.68, marking the worst-performing blue chip of the day; CSPC Pharma (1093) $CSPC PHARMA (01093.HK)$ Fell HK$0.32 or 4.23%, closing at HK$7.25; Ali Health (0241) $ALI HEALTH (00241.HK)$ Fell HK$0.16 or 4.19%, closing at HK$3.66; JD Health (6618) $JD HEALTH (06618.HK)$ Fell HK$1.70 or 4.27%, closing at HK$38.10; Innovent Bio (1801) $INNOVENT BIO (01801.HK)$ Fell HK$2 or 2.54% to close at HK$76.85. Citi noted that the likelihood of U.S. regulations restricting investment in Chinese biotech passing is low and views this pullback as a good buying opportunity.

Auto stocks also declined in tandem, with XPeng (9868 $XPENG-W (09868.HK)$ ) down HK$3.95 or 5.49% to close at HK$68.05; Li Auto (2015) $LI AUTO-W (02015.HK)$ fell HK$2.80 or 4.52% to close at HK$59.10; $BYD COMPANY (01211.HK)$ BYD (1211 $NIO-SW (09866.HK)$ ) dropped HK$3.50 or 3.62% to close at HK$93.25; Nio (9866) fell HK$1.66 or 3.38% to close at HK$47.46. w

Chip and optical communication stocks bucked the downtrend, supported by NVIDIA CEO Jensen Huang’s upbeat outlook on Marvell Technology, which lifted market sentiment. SMIC (0981 $SMIC (00981.HK)$ ) rose HK$1.00 or 1.22% to close at HK$82.95; Hua Hong Semiconductor (1347) $HUA HONG GRACE (01347.HK)$ gained HK$3.80 or 2.57% to close at HK$151.70; Montage Technology (6809) $MONTAGE TECH (06809.HK)$ jumped HK$22.80 or 6% to close at HK$403; GigaDevice (3986 $GIGADEVICE (03986.HK)$ rose HK$24.5 or 3.45%, closing at HK$735.5; Biren Technology (6082) $BIREN TECH (06082.HK)$ gained HK$0.7 or 1.1%, closing at HK$62.35. The optical communication and PCB sectors also advanced in tandem, with Yangtze Optical Fibre & Cable (6869) $ESPEC (6859.JP)$ saw its target price raised to HK$230 by Morgan Stanley, surging HK$24.8 or 10.65% to close at HK$257.6; Kingboard Laminates (1888) rose HK$4.73 or 9.55%, closing at HK$54.25; Lightelligence (1879) jumped HK$102 or 16.8%, closing at HK$708.

In individual stocks, Lenovo (0992) $LENOVO GROUP (00992.HK)$ ended a seven-day winning streak, retreating 1.66% from its highs to close at HK$26.14. Resource stocks outperformed the broader market, with CITIC Limited (0267) $CITIC (00267.HK)$ up 2.33%, closing at HK$13.63, leading blue chips higher amid market weakness; Techtronic Industries (0669) $TECHTRONIC IND (00669.HK)$ rose HK$2.1 or 1.81% to close at HK$118.4, boosted by positive US job openings data. AI large-model stock Zhipu AI (2513) $Z.AI (02513.HK)$ climbed HK$50 or 3.54%, closing at HK$1,463. New listing Shougang Langze (2553 $SHOUGANG LANZA (02553.HK)$ ) debuted today, closing at HK$21.06, up 44.2% from its IPO price, yielding a per-lot paper profit of HK$1,292.

The global semiconductor sector outperformed in Hong Kong today despite the broader market's weakness, as chip stocks continued to benefit from escalating AI-related capital expenditure. With COMPUTEX 2026 and NVIDIA GTC Taipei currently underway in Taipei, NVIDIA CEO Jensen Huang emphasized Taiwan as the 'epicenter of the AI revolution' and projected annual investments in Taiwan reaching as high as USD 150 billion, fueling sustained market attention on Asia’s full semiconductor supply chain. On the supply side, SK Hynix has already sold out its entire 2026 capacity for HBM, DRAM, and NAND and plans to double its wafer capacity within five years; Taiwan Semiconductor continues to achieve record-high gross margins in advanced processes; meanwhile, Chinese manufacturers such as SMIC are rapidly expanding production, accelerating domestic substitution efforts with a target of achieving 70% local usage of advanced silicon wafers by 2026. Overall, combined 2026 capital expenditures by major Asian semiconductor firms are expected to exceed USD 136 billion, an annual increase of over 25%, with AI demand remaining the core growth driver.

Investors seeking a single investment vehicle to capture opportunities across the entire Asian semiconductor industry chain may consider the E Fund Asia Semiconductor Select Index ETF (3486). $EFund A SEMICON ETF (03486.HK)$ which rose today against the broader market trend, benefiting from overall strength in the chip sector. The ETF selects 30 leading semiconductor companies from Hong Kong, Japan, South Korea, and Taiwan, including Taiwan Semiconductor, $SMIC (00981.HK)$ SMIC (0981), $HUA HONG GRACE (01347.HK)$ Hua Hong Semiconductor (1347), $ASMPT (00522.HK)$ ASMPT (0522), $LENOVO GROUP (00992.HK)$ Lenovo Group (0992 $GIGADEVICE (03986.HK)$ ), and GigaDevice (3986), covering core segments such as wafer foundry, memory, equipment, and packaging & testing, with 15 stocks each from Hong Kong-listed and non-Hong Kong-listed markets. Since its base date in March 2020, the index has delivered a cumulative return of 426%, with one-year and two-year returns of 72% and 185%, respectively. Investors should note that the ETF is concentrated in the semiconductor sector and is therefore subject to sector-specific and geographic concentration risks, higher net asset value volatility, and foreign exchange fluctuations across multiple markets. Past index performance does not guarantee future fund results, and this ETF is suitable for investors who are bullish on the long-term growth of Asia’s semiconductor industry and sustained demand for AI computing power.

@孫子的末代傳人 @中戶變大戶小牛變大牛 @股海GSO

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