Hang Seng Index climbs 1.61% as chip stocks lead Hong Kong rally

Hong Kong's Hang Seng Index rose 1.61% at the midday close, with the Hang Seng Tech Index (HSTECH) gaining 2.01% as chip and optical-communication stocks led a broad advance across the city's equity market.

Semiconductor Manufacturing International Corp (中芯國際, 0981.HK) said AI-related demand would continue to underpin orders for its production and that it had raised prices for its most sought-after capacity, according to Reuters. The comments helped drive a rally across Hong Kong-listed chipmakers, with investors betting on sustained artificial-intelligence capital spending through the rest of the year.

Yangtze Optical Fibre and Cable (長飛光纖光纜), Hua Hong Semiconductor (華虹半導體) and SMIC each climbed more than 7%, while GigaDevice (兆易創新) added nearly 7% and Montage Technology (瀾起科技) and Converge (匯聚科技) rose close to 5%. Non-ferrous metals led sector gains, with MMG (五礦資源) up more than 8% and Zijin Gold International (紫金黃金國際) and CMOC (洛陽鉬業) each advancing over 4%.

The advance extends a regional AI-driven semiconductor upswing. Taiwan's statistics agency this week raised its 2026 GDP growth forecast to 11.05%, the fastest in nearly four decades, citing strong AI demand, while Japan's Nikkei 225 has climbed to 68,713.80, up 0.59%. The Shanghai Composite edged up 0.01% to 3,927.18, lagging the Hong Kong benchmark's midday move.

Traders pointed to tightening foundry capacity and sustained AI capital spending as the primary drivers of the chip rally, with SMIC's price increase reflecting strong demand for advanced-node production. The strength in non-ferrous metals tracked firmer commodity prices, with gold futures near $4,373.90 an ounce, up 0.24%, and copper at $1,379.00 a pound, up 0.23%. The move came as the U.S. 10-year Treasury yield held near 4.69%, keeping global risk appetite intact for equities.

The rally in optical-communication names such as Yangtze Optical Fibre points to rising demand for data-center connectivity as cloud providers expand capacity to support AI workloads. That theme has underpinned a broader re-rating of Hong Kong-listed technology stocks, which have outpaced mainland peers this week as southbound flows favored the sector.

The midday gains leave the Hang Seng Index on track for a weekly advance, with investors watching for further foundry earnings and capacity announcements to sustain momentum into the afternoon session. A continued rally in chip stocks would reinforce confidence in the AI supply chain, though stretched valuations in some semiconductor names leave room for profit-taking as the sector's run extends.

This article is for informational purposes only and does not constitute investment advice.