HSI surges 476 points as Alibaba AI deal, cooling PPI fuel tech rally

Hong Kong stocks rallied 1.9% as cooling US producer prices and Alibaba's Apple Intelligence deal drove a broad tech rally, while memory chip stocks slumped on a US trade investigation.

The Hang Seng Index surged 476 points, or 1.9%, to 25,157 by midday, after US producer price growth slowed and Alibaba secured approval to integrate its Qwen AI into Apple Intelligence. The index touched a session high of 25,188 before paring gains slightly. The Hang Seng Tech Index climbed 3.1% to 4,886, while the Hang Seng China Enterprises Index added 2.3% to 8,369. Half-day turnover reached HKD 178.1 billion.

The rally followed US data showing producer price growth slowed last month, lowering expectations for further Federal Reserve rate hikes. The three major US stock indices closed up 0.3% to 0.6%, with large-cap tech stocks outperforming, though most chip stocks declined — a pattern that carried into Hong Kong's session.

Alibaba Group (9988.HK) jumped 4.8% after China's Cyberspace Administration approved Apple Intelligence for launch in the country, with Alibaba's Qwen model integrated into iOS, iPadOS, macOS and visionOS. US shares of Alibaba rose more than 6% in pre-market trading. Baidu (9888.HK) rose 3.9% on reports it will develop AI-powered search functions for iPhone users in China. Tencent Holdings (0700.HK) added 3.2%, Kuaishou Technology (1024.HK) surged 6%, Xiaomi Corp (1810.HK) gained 6%, and Meituan (3690.HK) climbed 5.3%.

Memory Chip Stocks Slide on US Trade Probe

Memory chip stocks plunged after the US International Trade Commission launched a Section 337 investigation into DRAM equipment, triggering a selloff across Asia-Pacific semiconductor names. Hua Hong Semiconductor (1347.HK) fell 2.8%, Gigadevice Semiconductor (3986.HK) dropped 7.7%, and Montage Technology (6809.HK) slid 17.2% after its South Korean office was raided over allegations of semiconductor component price manipulation.

The session's divergence shows how sector-specific risks continue to shape Hong Kong's market even as macro tailwinds lift the broader index. Alibaba's AI deal with Apple opens a significant revenue channel in China, where Apple sales rose 28% to $20.5 billion in the second quarter. Traders will watch for further US economic data and any escalation in the ITC probe, which could widen the selloff to other Asia-Pacific semiconductor names.

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