China's AI valuation catch-up and fresh policy support are driving renewed bullish momentum in Hong Kong equities, with the Hong Kong 33 reclaiming key technical levels.
Key takeaways
- China’s AI leaders and fresh PBoC liquidity support are driving a valuation catch-up in Hong Kong’s technology and internet sectors.
- Hong Kong 33 has reclaimed its 50-day moving average, with improving RSI momentum reinforcing a bullish medium-term outlook.
- A break above 25,230 may see 25,650 and 26,065, while a close below 24,600 would weaken the bullish recovery.
The Hong Kong stock market has been a top performer, with its benchmark indices, the Hang Seng Index (HSI) and Hang Seng TECH Index, posting month-to-date gains of 9.1% and 3.5%, respectively, as of 24 July 2026 (see Fig. 1).
Fig. 1: Month-to-date global stock indices performance as of 24 Jul 2026 (Source: MacroMicro). The information presented is historical information, and past performance is not indicative of future performance.
China’s Big Tech/AI catch-up and policy support
There are two primary structural tailwinds that have fuelled the current rally in the Hong Kong stock market.
Firstly, the HSI and the Hang Seng TECH Index have been a massive valuation catch-up within China’s internet and technology sectors.
Investors and traders are increasingly pricing in China’s competitive edge in lower-cost, highly efficient open-source AI deployment, which is translating into faster enterprise adoption and improving data-centre monetisation, such as the recent announcement of Moonshot AI’s open-weight Kimi K3 model and Alibaba’s flagship Qwen3.8 Max preview model.
Secondly, indirect monetary easing in China, where the People’s Bank of China (PBoC) executed its largest Medium-Term Lending Facility (MLF) liquidity injection of 500 billion yuan in five months, fuelling optimism ahead of late-July Politburo economic policy directives.1
In contrast, US semiconductor stocks (PHLX Semiconductor Index), which have a direct correlation with South Korea’s KOSPI, underperformed with a month-to-date loss of 11.5%, dragging down the Nasdaq 100 (-5.6%) over concentration risks in AI infrastructure-related and high memory bandwidth semiconductor stocks.
Let’s now focus on the Hong Kong 33 CFD from a technical analysis perspective.
Back above the 50-day MA with potential bullish momentum conditions
Fig. 2: Hong Kong 33 CFD medium-term trend as of 27 Jul 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The price actions of the Hong Kong 33 CFD (a proxy of the Hang Seng Index futures) have rallied by 12% from its recent 52-week low of 22,522 printed on 26 June 2026, where it stalled right at the lower boundary of its major ascending channel from the 22 January 2024 low (see Fig. 2).
It has now evolved into a medium-term ascending channel, trading back above its 50-day moving average since 20 July 2026, with a current bullish condition (rebounded from the 50 level) being flashed out on its 4-hour RSI momentum indicator.
Watch the 24,765/24,600 key medium-term pivotal support, and a clearance above the 25,230 intermediate range resistance sees the medium-term resistances coming in at 25,650 (also the 200-day moving average) and 26,065.
On the flip side, failure to hold and a daily close below 24,600 invalidates the bullish tone for a potential correction to expose the next medium-term supports at 23,850 and 23,165.
This article and its contents are intended for educational purposes only and should not be considered trading advice.
