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Hang Seng index heads for worst month since October on AI fears
The Hang Seng Index was at 26,545.09 as of 9.45 am on February 27 (up 0.6% that day), but it fell 3.2% for the month — its worst monthly performance since October, amid concerns about AI’s potential disruption to traditional industries.
The Hang Seng Tech Index rose 0.9% as of 9.45 am February 27, while the CSI 300 and Shanghai Composite indices dipped 0.4% and 0.1%, respectively.
Sun Hung Kai Properties gained 5.4% after the company posted a 36% profit increase in the first half.
CK Asset Holdings rose 3.4% after agreeing, together with other listed vehicles owned by billionaire Li Ka-shing, to sell a UK power distributor.
Investors said the so-called AI “scare trade” has clouded sentiment, with worries AI could upend sectors like logistics, software, and wealth management.
Nvidia posted strong results, but revenue missed Wall Street’s most bullish estimates, which did little to reverse sentiment.
Other major Asian markets, including Japan’s Nikkei 225 and South Korea’s Kospi, also traded lower.
🔗 Source: South China Morning Post
🧠 Food for thought
Implications, context, and why it matters.
Hong Kong’s market is split between AI anxiety and AI optimism around AI-focused listings
- Selling linked to AI has hit a few industries harder than others.
- After Alibaba touted AI-powered cancer screening, shares of US blood-based cancer-detection firm Grail fell about 60% over two days, then the jitters spread to similar Hong Kong-listed companies 1.
- Some money has shifted into higher-dividend “old economy” names such as shipping and consumer businesses, which some investors view as safer holdings 1.
- Meanwhile, another group of traders has pushed up newly listed Chinese AI companies.
- Recent Hong Kong debuts Zhipu and MiniMax have jumped since listing, with Zhipu up 524% and MiniMax up 488% 2.
- Market participants tied the surge to fresh model launches and a domestic market where foreign large language models have limited access, which gives local builders more room to compete 3.
The AI scare trade is reshaping investor moves, while the longer-term outcome remains unclear
- Worries about AI disrupting established businesses have pushed investors to rethink where capital goes.
- Some investors have trimmed positions in large internet platforms, then moved into either AI-first stocks or industries seen as less exposed to AI disruption 2, 1.
- This shift puts added pressure on Hong Kong’s policy goals.
- New listing rules aim to draw “Specialist Technology Companies,” which includes AI firms 4.
- Profit taking in big tech alongside inflows into AI listings can create friction. Support for new challengers may also weigh on incumbents that still anchor Hong Kong’s market indices 2.
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