The Hong Kong stock market opened lower and continued to decline throughout the session, marking a three-day losing streak, with the Hang Seng Index falling below the 25,000-point threshold.

At the close, the Hang Seng Index was down 1.15%, or 291.45 points, at 24,961.95, with a total turnover of HK$342.805 billion. The Hang Seng China Enterprises Index fell 0.77% to 8,436.63, while the Hang Seng Tech Index dropped 1.75% to 4,888.39.

For the week, the Hang Seng Index declined 0.88%, the HSCEI gained 0.13%, and the HSTECH edged up 0.09%.

Analysts noted that after a significant rally in 2025, the Hong Kong market in 2026 appears somewhat subdued. Contributing factors include fundamentals, where seemingly strong first-quarter growth masked more pronounced internal divergence, with technology and external demand strong while consumption and domestic demand were weak, and liquidity, where the US dollar did not weaken as expected, two of four major central banks are moving towards tightening, and both southbound and overseas capital inflows have shrunk significantly.

The outlook and direction for the Hong Kong market in the second half of the year are seen as being tied to changes in these two areas.

Blue-Chip Performance

OOIL (HKEX: 00316) led gains among blue-chip constituents. Its shares closed up 6% at HK$143.2, with a turnover of HK$300 million, contributing 1.67 points to the Hang Seng Index.

Reports indicated strong price hike intentions from shipping lines, with Maersk's week 23 booking quotes for high-cube containers around $3,600-$4,000, MSC quoting $3,940 for 40-foot containers, and ONE's online quote at $3,541 for large containers. These early June quotes were significantly higher than the $2,850 level seen at the end of May.

Actual offline cargo collection prices were also reportedly in the $3,500-$3,600 range for large containers, showing a clear increase from late May.

Among other blue-chips, China Resources Mixc Lifestyle Services Ltd (HKEX: 01209) rose 2.27% to HK$42.32, contributing 1.03 index points. Haier Smart Home Co Ltd (HKEX: 06690) gained 2.24% to HK$20.98, contributing 1.75 points.

On the downside, SMIC (HKEX: 00981) fell 7.18% to HK$75.65, dragging the index down by 38.97 points. Tingyi (Cayman Islands) Holding Corp (HKEX: 00322) dropped 6.1% to HK$12.16, weighing on the index by 2.46 points.

Key Sector Movements

Major technology stocks remained under pressure, with Tencent and Alibaba both declining. Container shipping stocks mostly advanced on strong pricing signals from carriers. Banking stocks rose against the market trend, with analysts suggesting a fundamental inflection point is largely established. Some robotics-related concepts saw afternoon rallies.

Conversely, semiconductor stocks saw a broad retreat. The PCB concept, optical communications, and Hong Kong & international financial stocks were generally under pressure.

Semiconductor Sector Sees Sharp Pullback

At the close, Montage Tech (HKEX: 06809) plunged 9.21% to HK$368.8. GigaDevice Semiconductor (Beijing) Inc (HKEX: 03986) tumbled 8.02% to HK$723.0. SMIC (HKEX: 00981) fell 7.18% to HK$75.65. Hua Hong Semiconductor Ltd (HKEX: 01347) dropped 7.16% to HK$145.3.

The sell-off followed overnight weakness in US chip stocks, with the Philadelphia Semiconductor Index closing down over 2%. Broadcom slumped more than 12% and Micron Technology fell over 7% after Broadcom's latest revenue figures slightly missed market expectations, casting a shadow over the AI investment boom and prompting investors to reassess whether AI infrastructure spending has already priced in future growth.

South Korean markets also fell sharply, with SK Hynix plunging nearly 10%.

Hong Kong and International Financial Stocks Under Pressure

Prudential plc (HKEX: 02378) fell 6.39% to HK$101.1. STANDARD CHARTERED PLC (HKEX: 02888) declined 4.91% to HK$201.4. HSBC Holdings plc (HKEX: 00005) dropped 3.14% to HK$141.8. AIA Group Ltd (HKEX: 01299) was down 3.52% at HK$74.0.

Stocks of several London-listed financial groups with significant Asian operations were sold off. Some analysts viewed this as a market misinterpretation of reasonable regulatory measures, arguing that the measures actually strengthen the position of international financial institutions operating through connectivity mechanisms and conducting normal offshore deposit-taking in Hong Kong, formalizing existing processes.

Regarding the insurance sector, it was noted that regional insurers, including AIA, Prudential, and FWD, already have their Hong Kong-based agents prohibited from conducting business on the mainland, with all sales processes required to be conducted within Hong Kong.

Container Shipping Stocks Mostly Higher

Leshi Shipping Logistics Co Ltd (HKEX: 02490) climbed 7.30% to HK$3.97. COSCO SHIPPING Holdings Co Ltd (HKEX: 01919) advanced 6.68% to HK$15.02. OOIL (HKEX: 00316) rose 6.00% to HK$143.2. SITC International Holdings Co Ltd (HKEX: 01308) gained 1.39% to HK$34.98.

Carriers continued to push for rate increases. Analysts pointed to strong domestic export performance in the first four months and a global restocking wave boosting cargo volumes. Supply growth for 2026 is estimated at 4%-5%, a five-year low, with reduced sailing speeds and port congestion significantly compressing effective capacity.

Mainland Bank Stocks Rise Against Market Trend

China Construction Bank Corporation (HKEX: 00939) increased 1.99% to HK$8.72. China CITIC Bank Corporation Limited (HKEX: 00998) was up 1.77% at HK$7.46. Industrial and Commercial Bank of China Limited (HKEX: 01398) rose 1.64% to HK$6.83.

Research indicates the fundamental inflection point for banks is largely established, with 2026 performance entering an improvement phase. Credit growth is expected to be stable, net interest margin stabilization trends are continuing with signs of recovery, and liability cost optimization is a key source of earnings elasticity. Opportunities for expanding intermediate business income remain. Overall asset quality is expected to remain stable, though risks in key areas need monitoring. The sector's shift to a new normal of stable volume and improving quality supports valuation repair, highlighting its dividend value.

Notable Movers

Three new stocks debuted with divergent performances. LONGBIO-B (HKEX: 01779) surged 37.21% to HK$131.8. LUNG FUNG GROUP (HKEX: 02290) plummeted 45.75% to HK$2.81. Dajin Heavy Industry Corporation Ltd (HKEX: 01081) closed flat at HK$66.4.

The three companies, operating in Hong Kong drugstore retail, offshore wind power equipment, and innovative biopharmaceuticals respectively, listed simultaneously on the Main Board of the Hong Kong Stock Exchange. LONGBIO-B performed the best, having surged over 60% in morning trade. The company focuses on the independent discovery and development of biologic drugs for allergic and autoimmune diseases.

Wah Sun Holdings Limited (HKEX: 01657) resumed trading and skyrocketed, closing up 105.33% at HK$61.6. The surge followed an announcement that the offeror had acquired approximately 74.91% of the issued shares from the vendor for a total cash consideration of HK$198.5 million.

Zhenjiu Li Du Group Limited (HKEX: 06979) gained throughout the day, closing up 6.56% at HK$7.8. Analysts noted benefits from inventory destocking in the second half of 2025 and Spring Festival sales performance, expecting first-half 2026 revenue decline to narrow to a mid-single-digit percentage, better than initial market expectations of a double-digit drop.

ZTE Corporation (HKEX: 00763) extended gains, closing up 4.51% at HK$29.66. Analysis suggests a potential re-rating as investor focus shifts to the recovery phase and AI catalysts re-emerge. At the edge device end, the company's cooperation with ByteDance on the "Doubao" AI assistant, integrating agent, multimodal, and system-level AI capabilities into smartphones, has shown strong early market interest with initial product batches selling out.