Hong Kong stocks slide to four-month low as stimulus hopes fade

Hong Kong stocks slumped four-month lows on Thursday, while ​mainland blue chips edged closer to a technical bear ​market, as a selloff in tech shares ‌and ​fading expectations for fresh stimulus to shore up China's economy dented investor sentiment. In Hong Kong, the benchmark Hang Seng index tumbled 2.9%, while the city's tech shares ‌dived 4.6%.

In the mainland market, the blue-chip CSI300 index lost 1.3% at the midday break, leaving it nearly 20% below its June peak. The benchmark Shanghai composite index dropped 0.9%. The 20% threshold from a recent peak is widely defined as marking a ‌technical bear market.

Market sentiment has been hurt by disappointment over Beijing's piecemeal stimulus measures, traders and analysts said, while ‌stronger-than-expected third-quarter economic growth has further reduced expectations for additional policy support. "China's limited stimulus measures announced ahead of the National Day holiday, including mortgage interest subsidies for first-time buyers of lower-priced properties, disappointed market expectations," said Kelly Chung, chief investment officer for multi assets at Value Partners.

"Investors have ⁠consequently largely ​priced out the possibility of ⁠further near-term stimulus." China's economic growth bounced off three-year lows in the third quarter, as roaring exports offset consumers' tight grip on their wallets, though ⁠analysts warn the growing reliance on external drivers is deepening structural imbalances.

Beyond that, a drag from a global sell-off in AI-related stocks ​also contributed to weakness in the Chinese market. "In the first half of 2026, both institutional funds ⁠and individual investors allocated most of their holdings to the technology sector, as reflected in the concentration of holdings in mutual funds' second-quarter reports," said Leo ⁠Wang, ​partner at Beijing-based Qianchuang Capital.

"This created a severe bubble in certain sectors and a serious drain on others." The start-up board ChiNext Composite index tumbled 2.8% and Shanghai's tech-focused STAR50 index declined 1.6% at midday on Thursday.

In Hong Kong, ⁠Tencent Holdings slumped 3.4% and Alibaba dived 6%, leading the broader declines. "Such a sharp and rapid decline is very ⁠rare, especially for a market ⁠leader like Tencent. This is likely the last of the panic selling, with the market selloff nearing its end," said Zeng Wenkai, chief investment officer at Hong Kong-based Shengqi Capital. "However, ‌such painful wounds ‌will take time to heal."