On August 25, 2025, the Hong Kong stock market is surging, with short-term factors boosting technology stocks significantly!

The dovish stance of the Federal Reserve has stimulated a rise in global asset prices, with Hong Kong and A-shares continuing to rally today. $Hang Seng Index(800000.HK)$ The index has reached a nearly four-year high, peaking at 25,918 points, approaching the psychological barrier of 26,000 points. From a technical analysis perspective, the Hang Seng Index has maintained a solid upward trajectory thus far. $SSE Composite Index(000001.SH)$ and $Shenzhen Component Index(399001.SZ)$ A-shares have continued to strengthen, setting new highs for the year, contributing to an overall favorable atmosphere for both A-shares and Hong Kong stocks.

$Hang Seng TECH Index(800700.HK)$ Also robust, the technical trends have broken through previous resistance levels. The Hang Seng Index and the Hang Seng Tech Index broke significant resistance levels this morning, supported by high trading volume (total trading volume reached 369.6 billion HKD, the highest since April 11). The Hang Seng Index has surpassed its previous high, marking a four-year peak, while the Hang Seng Tech Index broke the 5,800 point threshold, thus surpassing the high seen in July. Currently, the momentum is directed toward the early-year high, specifically the resistance level of 6,195 points encountered during the peak enthusiasm for the technology sector when DeepSeek was released at the beginning of the year.

In previous articles over the past year, I have mentioned the current investment elements in Hong Kong stocks, so I will refrain from repeating them this time. Today, let us focus on the latest favorable factors:

Factors favoring the market in the short term

1. Interest rate environment

Benefiting from the increased expectations of interest rate cuts in the United States, the high-interest rate environment is expected to improve. Previous articles have frequently mentioned that falling interest rates tend to have a more significant positive effect on Hong Kong stocks, primarily affecting the calculations of valuation models.

Additionally, the market was concerned last week about the rise in interbank offered rates; however, this negative sentiment is expected to change as U.S. interest rates decline. From the chart above, the 1 Month-HIBOR has shown signs of retracement near the 3% level.

2. AI investment sectors are attracting significant attention.

Global stock markets have gradually stabilized in April, and Hong Kong stocks are no exception. However, the first turning point in the third quarter of this year occurred in mid-July when NVIDIA resumed the supply of H20 chips to China, which led to the Hang Seng Index reaching a new yearly high and the Tech Index achieving its highest level since April. Previous articles have also reiterated that the investment logic is to restore the positive trajectory of China's AI model development.

This month, there are reports in the market indicating controversies surrounding the H20 chip between the U.S. and China, but considering that the H20 chip is already an outdated product, this controversy is of little significance. As mentioned in last week's article, the latest market focus is on data center operations utilizing the Blackwell chip as the foundation, namely the GB200 NVL72. (Data reference: The earnings season for Hong Kong stocks demonstrates strong resilience; here are the market focuses to note in the short term!)

Additionally, data center operations are focusing on Huawei's "Chip Sea" strategy, with a server cabinet composed of 384 Ascend 910C chips demonstrating competitive advantages, driving strong stock performance in the overall AI investment in Keelung. For example, the stocks mentioned in last week's article, $SMIC(00981.HK)$ $HUA HONG SEMI(01347.HK)$ $YOFC(06869.HK)$ $ZTE(00763.HK)$ these are stocks that have recently shown significant volatility and upward momentum.

In the latest news, according to a report by The Wall Street Journal, artificial intelligence (AI) chip manufacturer NVIDIA is developing a customized AI chip, the B30, based on the latest Blackwell architecture for the Chinese market, with performance reaching 80% of the Blackwell GPU.

There are two reasons for the market's excitement regarding the B30A order:

1. China is expected to obtain more competitive computing power products than the H20, which will help alleviate the short-term supply tension for high-end domestically produced products (for example, the 7-nanometer semiconductors produced by SMIC still require time to improve yield rates and enhance technological levels).

2. The market is hopeful that progress will be made in the Sino-U.S. trade negotiations, as semiconductors have historically been a significant issue in these discussions. With NVIDIA's recent visit to China and the submission of an export permit application for the B30 chip, the market views this as favorable news indicating potential progress in the negotiations.

More importantly, the atmosphere will be conducive for a surge in technology stocks, with Tencent's share price reaching a new high in several years. The previously mentioned $BABA-W(09988.HK)$ $TENCENT(00700.HK)$ $BIDU-SW(09888.HK)$ $SENSETIME-W(00020.HK)$ $XIAOMI-W(01810.HK)$ Companies involved in large AI models are being sought after by investors.

3. The outlook on the economic prospects has become more optimistic.

With the Hong Kong and A-share markets performing well, the improved sentiment in the stock market is beneficial for the real economy. Without discussing the wealth effect of stock trading, financing channels for innovative industries have shown significant improvement. Companies creating innovations such as AI, autonomous driving, or innovative pharmaceuticals can raise funds through IPOs or various financing channels, leading to a more proactive approach in developing new projects, which in turn benefits the performance of the job market.

As the atmosphere in the financial markets improves, following previous reports that some international investment banks are canceling layoff plans, recent news has also emerged that Chinese-funded investment banks are increasing salaries. Positive news in the employment sector is one of the reasons stimulating the performance of non-essential consumer stocks. Another reason is the earnings performance exceeding market expectations. The market's shift from an overly negative outlook to a positive one has been a catalyst for the rapid rise in consumer stocks.

For example, the sports goods and automotive stocks mentioned in last week's video, as well as the Macau gaming stocks and domestic property stocks that are leading the gains today, may reflect the aforementioned factors.

$ANTA SPORTS(02020.HK)$ $XTEP INT'L(01368.HK)$ $LI NING(02331.HK)$ $GEELY AUTO(00175.HK)$ $LEAPMOTOR(09863.HK)$ $XPENG-W(09868.HK)$ $GALAXY ENT(00027.HK)$ $SANDS CHINA LTD(01928.HK)$ $MGM CHINA(02282.HK)$ $WYNN MACAU(01128.HK)$ $CHINA OVERSEAS(00688.HK)$ $CHINA RES LAND(01109.HK)$ $BEKE-W(02423.HK)$ $YUEXIU PROPERTY(00123.HK)$ $CHINA VANKE(02202.HK)$

In terms of policy, the "anti-involution" measures highlighted since July have already seen considerable speculative activity in several overcapacity industries, such as photovoltaic and paper stocks.

$XINYI SOLAR(00968.HK)$ $FUYAO GLASS(03606.HK)$ $FLAT GLASS(06865.HK)$ $XINTE ENERGY(01799.HK)$ $ND PAPER(02689.HK)$ $LEE & MAN PAPER(02314.HK)$

The decline in the consumer sector of the platform has also begun to stabilize, $JD-SW(09618.HK)$ with no significant drop following the earnings report. This week, the earnings reports of $PDD Holdings(PDD.US)$ and, $BABA-W(09988.HK)$ and $MEITUAN-W(03690.HK)$ will provide certain insights and warrant close attention to performance, reflecting the market's outlook on whether the economy will maintain an optimistic view.