Hong Kong's major stock indices experienced a further decline in the afternoon session, with the Hang Seng Tech Index seeing its losses widen to more than 2%. Among the index constituents, Huahong Semiconductor shares fell more than 7%, while SMIC dropped over 6%. Shares of BYD Electronic, Baidu, NIO, and XPeng all declined more than 3%.

A recent research report from a brokerage suggests the Hong Kong market has gradually completed a phase of bottoming out, establishing a medium-term base following April's TACO transaction. The market is transitioning from a phase driven by valuation and sentiment recovery to a new stage propelled by earnings validation and improving risk appetite. The Hong Kong market's underperformance over the past month is attributed to global capital flows favoring markets with greater exposure to AI computing power. Hong Kong's market weightings are concentrated in internet platforms, finance, consumer sectors, dividend stocks, and the AI application side, offering relatively limited direct exposure to the computing power supply chain. The market previously viewed the computing power segment as having the most certain fundamentals, leading to less focus on Hong Kong due to its limited computing power components. However, if the AI thematic trade expands from pure computing power to areas like computing power leasing, cloud services, AI applications, cybersecurity, data platforms, and enterprise software, the structural disadvantages of Hong Kong's tech assets could gradually transform into structural advantages.