According to Zhitong Finance APP, the "blue wave" rattled the outlook for AI infrastructure, triggering an epic overnight sell-off on Wall Street, with panic spreading to Asia-Pacific markets as investors awaited the October nonfarm payrolls report due tonight.

At the close, the Hang Seng Index fell 1.27%, or 315.12 points, to 24,481.86, with total daily turnover of HK$247.428 billion. The Hang Seng China Enterprises Index dropped 1.13% to 8,274.10, while the Hang Seng Tech Index declined 1.83% to 4,078.23. For the week, the Hang Seng rose 5.10%, the China Enterprises Index gained 5.24%, and the Hang Seng Tech Index climbed 8.61%. CICC's Liu Gang noted that the Hang Seng Tech Index's problems lie internally rather than externally, but its "advantage" is that valuations are low enough and its AI exposure is small. However, a rebound driven solely by improved external conditions and capital reallocation faces resistance from fundamental pressures and escalating geopolitical risks. During the recent rebound, heavy southbound net selling and rising short-selling volumes in Hong Kong stocks both indicate growing market divergence.

Blue Chip Performance

Li Ning (02331) led blue chip gains. At the close, it rose 5.16% to HK$15.48, with turnover of HK$1.706 billion. Li Ning announced that its board resolved to distribute a special dividend of RMB 2.32 per share (equivalent to HK$2.71). Based on approximately 2.585 billion issued shares, the total ordinary share dividend is estimated at about RMB 6 billion. Calculated against the November 5 closing price of HK$14.72, this special dividend corresponds to a yield of approximately 18.4%.

Among other blue chips, Hua Hong Semiconductor (01347) rose 4.31% to HK$70.2; Budweiser Brewing Company APAC (01876) gained 2.57% to HK$6.375; China Molybdenum (03993) fell 5.86% to HK$12.05; and Weichai Power (02338) dropped 7.26% to HK$21.96.

Hot Sectors

On the trading floor, the overnight rout across the US AI supply chain quickly spread to Asia-Pacific, with the AI hardware chain becoming the hardest-hit sector. Memory chips, PCB concepts, and optical communications led declines. Hua Hong Semiconductor bucked the trend with a 4.31% gain after reporting a sharp rise in third-quarter earnings following its merger with Huali Microelectronics. Internet stocks that surged yesterday all weakened, copper stocks fell on expectations of slowing AI infrastructure buildout, and gold stocks broadly tracked the pullback in gold prices. Safe-haven capital flowed into utilities and high-dividend assets with stable cash flows. Li Ning's HK$6 billion special dividend is seen by analysts as potentially helping to repair sentiment in consumer stocks.

AI hardware stocks led the declines. At the close, Yangtze Optical Fibre and Cable (06869) fell 10.46% to HK$86.05; Victory Giant Technology (02476) dropped 8.98% to HK$108.4; and Kingboard Laminates (01888) declined 6.98% to HK$30.4. Democrats retook control of both the Senate and House in the midterm elections, and Texas Governor-elect Hinojosa pledged to pause approvals for new data centers before regulations are introduced. Thursday saw a crash on Wall Street, with AI-related sectors suffering "liquidation-style" selling. The Philadelphia Semiconductor Index fell 12% in a single day, its largest drop since 2020. Panic quickly spread to Asia-Pacific markets this morning, with South Korea's KOSPI plunging over 8% at one point, triggering a circuit breaker. Japan's Nikkei 225 entered a technical bear market. Amid the sharp decline, several domestic tech companies issued midday announcements stating that their operations remain normal and that they intend to or are already buying back shares.

Gold and other non-ferrous metal stocks retreated collectively. At the close, China Gold International (02099) fell 6.60% to HK$171.1; Zijin Gold International (02259) dropped 2.57% to HK$136.5; and Lingbao Gold (03330) declined 2.45% to HK$16.73. The Democratic sweep of Congress raised AI regulatory concerns, triggering a sharp sell-off in US tech stocks on Thursday, with liquidity issues once again coming into focus. Meanwhile, on the Fed front, Richmond Fed President Barkin expects further rate hikes but said the pace and magnitude remain uncertain. Cleveland Fed President Hammack stated that rates need to be restrictive to bring inflation back to the central bank's target, and that more frequent adjustments can reduce the risk of policy falling behind the curve. Notably, the major shift in the US political landscape also dealt a blow to two key factors that had driven copper prices higher: the rapid buildout of AI infrastructure and the possibility of US tariffs on copper imports. Copper prices consequently fell to their lowest level since July.

Utilities and high-dividend stocks rose against the trend. At the close, CK Infrastructure Holdings (01038) rose 1.43% to HK$71.0; Power Assets Holdings (00006) gained 1.40% to HK$65.4; China Resources Power (00836) rose 1.19% to HK$20.4; and CLP Holdings (00002) added 1.19% to HK$80.95. As global tech valuations suffered a sharp sell-off and risk appetite contracted rapidly, capital rotated into utilities and high-dividend assets with stable cash flows and predictable payouts. Hong Kong's local utility stocks, including Power Assets Holdings, CLP Holdings, CK Infrastructure Holdings, and Hong Kong and China Gas, all posted gains. HSBC Research noted in a previous report that Hong Kong's utilities sector showed notable resilience and defensiveness during a recent market correction, gaining 5% cumulatively since the second half of this year versus a roughly 9% decline in the Hang Seng Index over the same period. The report emphasized that the market is increasingly inclined to differentiate based on company fundamentals, with individual stock fundamentals driving share price performance.

Notable Stock Moves

Elife International (00585) is pushing an AI-driven film and TV strategic transformation. At the close, it rose 14.69% to HK$6.44. Elife International announced plans to acquire a 67% stake in Beijing Tairan Ruoqing Culture Development Co., a leading domestic film and TV visual effects production company, at an overall valuation of approximately RMB 223 million, corresponding to a transaction consideration of about HK$171 million, payable in cash and consideration shares. This is not an ordinary external acquisition but a key strategic move for the company's full transformation into the AI film and television sector.

Boreton (01333) received a share purchase plan from its board chairman. At the close, it rose 10.16% to HK$18.22. Boreton announced that Chairman, Executive Director, and major shareholder Chen Fangming plans to increase his holdings in the company through open market purchases using personal funds, with a total consideration of no more than approximately HK$50 million. Chen stated that the increase reflects his firm confidence in the company's future prospects and long-term growth potential.

Hua Hong Semiconductor (01347) saw third-quarter net profit surge 136% year-on-year. At the close, it rose 4.31% to HK$70.2. Hua Hong Semiconductor reported third-quarter revenue of RMB 6.706 billion, up 13.95% year-on-year, and net profit attributable to shareholders of RMB 835 million, up 136.14% year-on-year. The earnings change was mainly driven by higher average wafer selling prices and increased sales volumes, which significantly boosted gross margin. The company completed the acquisition and consolidation of a 97.5% stake in Huali Microelectronics in the third quarter. It expects fourth-quarter revenue of US$1.08 billion to US$1.09 billion and gross margin of 25% to 26%.

SJM Holdings (00880) swung from profit to loss in the third quarter. At the close, it fell 11.89% to HK$1.075. SJM Holdings reported third-quarter gaming net revenue of HK$4.758 billion, compared with HK$6.537 billion in the third quarter of 2025. Adjusted EBITDA was HK$705 million, down nearly 20% from HK$881 million in the same period. The loss attributable to owners for the third quarter was HK$397 million, compared with a profit of HK$9 million in the third quarter of 2025.

Wynn Macau (01128) saw third-quarter property EBITDA fall 17%. At the close, it dropped 4.95% to HK$4.42. Wynn Macau announced the third-quarter 2026 results of controlling shareholder Wynn Resorts, Limited, with Macau operations generating operating revenue of approximately US$108 million, down 39.15% year-on-year. Adjusted property EBITDAR was approximately US$255 million, down 17.19% year-on-year.