① Apart from short-selling pressure, what other factors influence the direction of Hong Kong’s stock market? ② In the current environment where the credit cycle may slow down with fluctuations, how do institutions view the future performance of Hong Kong stocks?
Cailian Press, March 5 (Editor Hu Jiarong) The Hong Kong stock market has continued to weaken recently, with the Hang Seng Tech Index showing particularly sluggish performance. As of March 4, the index had fallen by more than 12% since the beginning of 2026, reflecting a growing cautious sentiment in the market towards the technology sector.
At the individual stock level: Short-selling data for the three major technology giants hit new highs in recent periods.
The number of short-sold shares of Alibaba surged from 5.6405 million at the beginning of February to 22.9653 million on March 4, while the short-selling amount increased from HKD 925 million to HKD 2.979 billion. The single-day short-selling volume on March 4 reached its highest point since January 15, 2025.
Note: Short-selling data for Alibaba.
The number of short-sold shares of Tencent rose from 1.2877 million at the beginning of February to 4.8359 million on March 4, and the short-selling amount expanded from HKD 768 million to HKD 2.443 billion, reaching its highest level since February 6, 2025.
Note: Short-selling data for Tencent.
The number of short-sold shares of Xiaomi Group increased from 27.8074 million at the beginning of February to 36.2064 million on March 4, with the short-selling amount rising from HKD 965 million to HKD 1.159 billion. On March 2 alone, the single-day short-selling volume reached 97.3336 million shares, setting a new record since April 9, 2025.
Note: Short-selling data for Xiaomi Group.
CICC interprets the three core logics.
Regarding the continued weakness in the Hong Kong stock market, CICC believes that it can be analyzed from three aspects. First, the credit cycle determines the overall index space. Since China’s credit cycle may rapidly recover from its low point in 2025 and move towards volatility or even a temporary slowdown by 2026, they expect limited upside potential for broad-based indices.
Second, industrial direction determines the momentum structure. The generally volatile credit cycle environment dictates that emphasis should still be placed on momentum structure. However, coincidentally, the structure of Hang Seng Tech is currently out of favor in the market, especially under the AI narrative where distinctions are drawn between “leaders and laggards” and “beneficiaries and losers.”
Thirdly, the liquidity environment amplifies volatility. For instance, at the macro level, Trump’s nomination of the ‘relatively hawkish’ Kevin Warsh as the new Federal Reserve Chairman has made investors worry about a tightening of global liquidity, which will have a greater marginal impact on Hong Kong stocks, especially those with longer durations like Hang Seng Tech; at the micro level, the supply from IPOs and secondary offerings in Hong Kong stocks is significantly larger, while the strength of A-shares also diverts the attention of southbound funds, creating a seesaw effect of capital flows between Hong Kong stocks and A-shares.
