Hong Kong stocks opened sharply higher as Alibaba's new AI model release reignited buying interest in Chinese tech names.
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HSI opens 1.1% higher as Alibaba AI model fuels tech rally
The Hang Seng Index rose 272 points, or 1.11%, to 24,835 at the open on Monday, while the Hang Seng Tech Index climbed 2.2% to 4,724. The Hang Seng China Enterprises Index added 1.43% to 8,252. The gains came despite a weak session on Wall Street on Friday, where the S&P 500 fell 1.6% and the Nasdaq 100 slid 4.1%, as investors rotated into Hong Kong-listed Chinese technology names on fresh AI developments.
"Alibaba's Qwen3.8 model launch is the clearest sign yet that Chinese AI labs are closing the gap with US peers on capability while maintaining a significant cost advantage," said Gary Ng, senior economist at Natixis Corporate and Investment Banking. "This is drawing capital back into the HK tech space after last week's global semiconductor selloff."
Alibaba Group (阿里巴巴, 9988.HK) opened 3% higher after announcing the upcoming release of Qwen3.8, which the company described as potentially the most powerful model outside of Anthropic's Fable 5. The broader tech complex followed: Meituan (03690.HK) rose more than 2%, JD.com (09618.HK) gained 2%, and Xiaomi (01810.HK) added 2%. Tencent Holdings (00700.HK) edged up 0.87%. Semiconductor names that were battered last week rebounded, with Semiconductor Manufacturing International Co (00981.HK) climbing 2.88% and Lenovo Group (00992.HK) rising 2.8%. BYD Co (01211.HK) added 2.37%.
The rally marks a reversal from last week's selloff, when the HSI gained 1.6% for the week but tech-heavy names were dragged down by a global chip rout that sent the Philadelphia Semiconductor Index into a bear market, down 20.3% from its June record. The World Artificial Intelligence Conference in Shanghai and Chinese startup Moonshot's launch of the Kimi K3 model — which reportedly rivals leading US models at a fraction of the cost — have shifted the narrative back toward AI opportunity rather than valuation concerns. Local AI rivals Zhipu fell 32.5% and MiniMax dropped 19.6% last week as competition intensified, though MiniMax-W (00100.HK) recovered 1.85% at Monday's open.
Among heavily traded names, Kingboard Holdings (00148.HK) gained 5.54% and KB Laminates (01888.HK) climbed 4.81%. The XL2CSOPHYNIX leveraged product (07709.HK) surged 15%, reflecting speculative interest in Hong Kong-listed tech-linked instruments. On the corporate front, Zhongji Innolight secured approval for a Hong Kong listing of up to US$7 billion, while Baidu announced plans to upgrade its Hong Kong listing to dual-primary status, paving the way for Stock Connect inclusion.
The HSI had attempted to break resistance near 25,050 on Thursday before being rejected. A successful breach of that level would open the way to challenge the 200-day moving average near 25,800, which would revert the medium-term trend to bullish. Immediate support sits near 23,800 to 24,000. The offshore yuan traded near 7.26 per US dollar, while US 10-year Treasury yields held around 4.15%, providing a stable rates backdrop for the region.
The divergence between Hong Kong and US markets this week will be tested by earnings from two of the Magnificent Seven — Alphabet and Tesla — due to report alongside Intel, Texas Instruments and IBM. For Hong Kong, the key question is whether AI-driven buying can sustain momentum beyond the opening session, particularly with the ECB rate decision on Thursday and UK and Japanese inflation data due this week shaping global risk appetite.
This article is for informational purposes only and does not constitute investment advice.
