Hong Kong's stock market opened lower and trended downwards today, with the three major indices collectively retreating in the late session. Global chip and semiconductor heavyweights experienced a collective surge, propelling related semiconductor ETFs, Nasdaq-tracking ETFs, memory ETFs, and Korea-focused ETFs higher across the board. By the close, the Hang Seng Index had fallen 1.06% to 25,328.23 points, with a full-day turnover of HKD 320.758 billion. The Hang Seng Tech Index declined 0.79% to 4,907.57 points. Among major Hong Kong ETFs by size, Tracker Fund (02800) closed down 1.01% at HKD 25.56. CSOP 2x Long SK Hynix Daily (07709) surged 22.01% to HKD 132.5. Hang Seng China Enterprises Index Fund (02828) closed down 1.38% at HKD 86.94.

Sector Performance: 1. U.S. Chip Surge and Korean Market Circuit Breaker Drive Semiconductor and Nasdaq ETFs Higher. By the close, Huatai-PineBridge CSI Korea Semiconductor ETF (513310) rose 5.69% to CNY 6.498. CSOP Asia Pacific Select ETF (159687) gained 5.07% to CNY 1.927. E Fund Asia Semiconductor ETF (03486) increased 3.02% to HKD 23.22. GF Nasdaq 100 ETF (159941) advanced 2.17% to close at CNY 1.649. Overnight, U.S. chip and semiconductor stocks staged a collective rally, with the S&P 500 and Nasdaq indices hitting new highs. UBS significantly raised its price target for Micron Technology. Concurrently, South Korea's KOSPI index surged sharply today, triggering a circuit breaker mechanism. SK Hynix's market capitalization surpassed KRW 1 quadrillion, and the approval of a labor agreement at Samsung Electronics temporarily eased strike risks. Driven by these multiple positive factors, related semiconductor and Nasdaq ETFs strengthened across the board. In the domestic market, Cinda Securities noted that AI investment is strongly driving demand in the semiconductor supply chain. Domestic memory leader ChangXin Memory Technologies (CXMT) reported explosive earnings growth. Coupled with its imminent A-share IPO review and Yangtze Memory Technologies Co. (YMTC) initiating IPO guidance, the semiconductor equipment sector is poised for significant positive catalysts. The firm recommends focusing on the semiconductor equipment segment benefiting from downstream capacity expansion and domestic substitution.

2. Samsung Risk Eases and KOSPI Hits New High, Boosting Korea and Memory ETFs Throughout the Day. By the close, CSOP 2x Long SK Hynix Daily (07709) surged 22.01% to HKD 132.5. CSOP 2x Long Samsung Electronics Daily (07747) rose 6.48% to HKD 167.6. TR Korea ETF (02848) gained 4.09% to HKD 1997. On the news front, according to reports, the results of an internal vote at Samsung Electronics were announced on May 27. A previously reached tentative labor agreement received 73.7% approval, temporarily easing the risk of a major strike at Samsung Electronics. On the same day, the KOSPI index's intraday gain expanded to 5%, triggering another circuit breaker, with SK Hynix's market cap exceeding KRW 1 quadrillion. Analysts at Huatai Securities view the current surge in the Korean stock market as ignited by AI demand. A few tech giants like Samsung Electronics and SK Hynix hold significant weight in the KOSPI index. The surge in AI demand has driven a memory chip boom. Samsung Electronics and SK Hynix reported better-than-expected Q1 2026 earnings, becoming a key driver behind the Korean market's sharp rise.

Institutional Views: CITIC Securities points out that factors such as downward revisions to earnings expectations, Middle East conflict disruptions, and capital diversion towards overseas AI infrastructure momentum trades have brought Hong Kong stock valuations back to relatively reasonable levels. Looking ahead to the second half of the year, the firm anticipates that a "constructive strategic stability" in China-U.S. relations will boost investor sentiment in Hong Kong stocks. Against the backdrop of the first year of the 15th Five-Year Plan, the technology sector is expected to see the scaled implementation of the token economy and accelerated industrialization of humanoid robots. Stabilization in the residential property market and the "return" of wealth effects in equity markets may drive a domestic consumption recovery, forming a positive feedback loop. CITIC Securities states that following the Q1 earnings season, negative fundamental factors for Hong Kong stocks have largely been priced in. After four significant outflow waves starting from Q4 2025, foreign capital has shown signs of returning since mid-May 2026. Following external disturbances, southbound capital is also expected to accelerate its allocation to Hong Kong stocks. The firm maintains an overall optimistic view on Hong Kong stocks for the second half but cautions that Q3 may see liquidity pressure from a peak in share lock-up expirations.