Hong Kong equities reversed an overnight Wall Street rally, with the Hang Seng Index sliding 438 points as technology heavyweights tumbled on AI monetization concerns.
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HSI slumps 438 points as tech selloff deepens on AI uncertainty
Hong Kong equities reversed an overnight Wall Street rally, with the Hang Seng Index sliding 438 points as technology heavyweights tumbled on AI monetization concerns.
Hong Kong's Hang Seng Index fell 1.68% to 25,599 at midday on June 3, dragged by a broad tech selloff after Tencent flagged uncertainty over its WeChat AI agent launch. The index opened 85 points lower before losses accelerated through the morning session. The Hang Seng Tech Index dropped 2.35% to 5,076, while the Hang Seng China Enterprises Index lost 2.09% to 8,579. Half-day turnover reached HKD169.8 billion, reflecting active institutional participation.
CMBI lowered its price target on Meituan to HKD138, sending the stock down 6.08% to HKD80.3 and erasing the prior session's gains. Tencent retreated nearly 4% after saying it could not determine a launch timeline for its WeChat AI agent, a key test of the company's ability to monetize generative AI through its super-app ecosystem. Short-selling in Tencent reached HKD1.78 billion, representing 12.3% of turnover, while Meituan saw HKD1.54 billion in short sales at a 40.1% ratio.
The selloff was concentrated in consumer-facing tech names. Alibaba fell 2.98%, Kuaishou slid 5.02%, and JD.com and Xiaomi each dropped more than 3%. Short-selling ratios were elevated across the board — JD.com at 46.2%, Xiaomi at 41.3%, and Meituan at 40.1% — pointing to aggressive hedging by institutional investors. Li Ning was the worst-performing blue chip, falling 6.1%, after Goldman Sachs said the sportswear company's signing of Stephen Curry would help brand strength but kept the financial impact this year as manageable. CSPC Pharma dropped 5.02%, while New Oriental, Trip.com, Wuxi Bio, and JD Health each fell more than 4%. Lenovo Group narrowed earlier losses after opening nearly 8% lower, closing down 2.63% at midday.
Semiconductor stocks bucked the broader decline, with SMIC rising 4.03% to lead blue chips, Hua Hong Semi gaining 6.02%, and Montage Tech surging 10.21%. The chip sector's strength reflects continued demand optimism tied to China's domestic semiconductor push and AI infrastructure buildout. YOFC jumped 16.92% after Morgan Stanley raised its target price to HKD230, while KB Laminates climbed 9.05% and Knowledge Atlas rebounded 6.66%.
The decline came despite a strong overnight session on Wall Street, where the S&P 500 and Nasdaq extended gains to a ninth consecutive session and the Golden Dragon China Index hit a two-week high. The divergence between tech and semiconductor stocks in Hong Kong points to rotational capital flows rather than systemic risk, though elevated short-selling ratios across major names suggest institutional hedging is intensifying. The market's next test comes as traders assess whether Tencent's AI monetization timeline will pressure valuations across the broader China internet sector, with the afternoon session set to open at 13:00 HKT.
This article is for informational purposes only and does not constitute investment advice.
