Hong Kong stocks trail peers despite AI-driven global rebound

Hang Seng TECH underperforms peers as China growth holds up and IPO activity picks up.

Hong Kong stocks underperformed compared to its regional peers and mainland China markets in April despite a broader global equity rebound driven by artificial intelligence-related shares, according to CGS International Securities.

In a 5 May report, the brokerage said the gap was more visible in technology stocks, with the Hang Seng TECH Index trailing China’s ChiNext and STAR50 indices as investors focused on AI infrastructure and semiconductor companies.

“The underperformance of Hang Seng TECH mainly reflects its limited exposure to relevant beneficiaries,” CGSI analysts said.

The weakness comes despite rising mainland investor interest in Hong Kong technology shares through the Stock Connect programme and the launch of HKEX’s Tech 100 Index, which tracks 100 Hong Kong-listed technology companies eligible for southbound trading.

Mainland investors account for about 25% of Hong Kong’s daily turnover, according to HKEX head of markets Gregory Yu.

Hong Kong IPOs linked to the AI computing supply chain posted strong gains after listing, showing continued investor interest in AI infrastructure firms. HKEX earlier said around 400 companies had applied to list in Hong Kong, including seven international technology firms.

Meanwhile, China’s economy grew 5% year-on-year (YoY) in the first quarter (Q1) of 2026, above Bloomberg estimates of 4.8%, based on National Bureau of Statistics data cited in the CGSI report.

However, March data pointed to slower momentum. Retail sales growth eased to 1.7% YoY from 2.8% in January-February, whilst fixed asset investment rose 1.7% in Q1, below market expectations.

CGSI also said tier-1 property markets showed “early signs of stabilisation” after Shanghai, Beijing, and Shenzhen relaxed home purchase rules. Shenzhen introduced additional easing measures on April 29.

The brokerage said policymakers did not announce major new stimulus measures during the April 28 Politburo meeting following stronger-than-expected first-quarter growth.

On the geopolitical front, CGSI said China used its 2021 blocking rules for the first time to counter US sanctions on Chinese refineries tied to Iranian oil trade ahead of an expected meeting between Chinese President Xi Jinping and US President Donald Trump on May 14 to 15.

The report also highlighted Chinese AI firm DeepSeek’s release of its V4 model, which was designed for domestic chips including Huawei Ascend processors.

CGSI said crowded positioning in mainland AI supply chain stocks could support a near-term rotation into Hong Kong technology shares.