Hong Kong stocks start October strong: Hang Seng Index breaks through 24000 points
On the first trading day of October 2026, the Hong Kong stock market kicked off with a strong performance, with the Hang Seng Index rising 2.35% to close at 24,256.78 points, successfully breaking through the 24,000-point psychological barrier and reaching a new high in nearly three months. This positive performance not only boosted market confidence but also set an optimistic tone for the Hong Kong stock market in the fourth quarter.
Market analysts point out that the strong start to Hong Kong stocks in October was driven by multiple favorable factors: on one hand, economic data from major global economies exceeded expectations, alleviating concerns about economic recession; on the other hand, better-than-expected quarterly earnings from tech giants led to a collective rally in related sectors; additionally, Hong Kong stocks still maintain significant valuation advantages, attracting continuous inflows of domestic and international capital.
Technology and financial stocks lead market rebound
In terms of sectors, technology and financial stocks became the main driving forces behind the market rally. The technology sector index surged 3.28%, with internet giants, semiconductor, and cloud computing related stocks showing particularly outstanding performance. Large technology stocks such as Alibaba and Tencent Holdings all rose more than 4%, while the semiconductor sector collectively soared, with Semiconductor Manufacturing International Corporation (SMIC) rising as much as 6.5%.
The financial sector also performed impressively, with banking and insurance stocks generally rising. The Hang Seng Financial sub-index increased by 2.87%, with international banking stocks such as HSBC Holdings and Standard Chartered Group rising more than 3%, and insurance giants like China Ping An and AIA Group also recording gains of over 2.5%.
Notably, mainland property stocks showed signs of stabilization after a long period of downturn, with leading stocks such as Vanke Enterprises and China Evergrande rising more than 2%, as market expectations for relaxed property policies have increased.
North-south funds continue to flow in, market activity increases
In terms of capital flows, both northbound and southbound funds showed net inflows, indicating that domestic and international investors' confidence in the Hong Kong stock market is recovering. Data shows that southbound funds (Stock Connect) had a net inflow of 8.56 billion Hong Kong dollars, maintaining net inflows for the fifth consecutive trading day, with technology and financial sectors being the main allocation directions.
Northbound funds also showed positive inflows, with a net inflow of 4.23 billion Hong Kong dollars, the highest in nearly two months. Foreign institutions generally favor Hong Kong's low valuation advantages and international characteristics, especially against the backdrop of improving global liquidity conditions, further highlighting the allocation value of Hong Kong stocks.
In terms of market activity, the total trading volume of Hong Kong stocks significantly expanded to 185.6 billion Hong Kong dollars, an increase of about 23% from the previous trading day, showing a significant improvement in market activity. The trading volume of Hang Seng Tech Index futures also increased simultaneously, indicating that investor optimism about the technology sector is rising.
Market sentiment significantly improves, institutions upgrade Hong Kong stock ratings
As the market continues to strengthen, market sentiment has clearly improved. The latest investor sentiment survey shows that over 65% of respondents are optimistic about the market outlook, a significant increase of 15 percentage points from the previous month. At the same time, short covering behavior has also intensified the market's upward momentum.
Several international investment banks have recently upgraded their Hong Kong stock ratings. Goldman Sachs raised its 12-month target price for the Hang Seng Index to 26,000 points, citing valuation advantages, improved earnings expectations, and increased policy support from China. Morgan Stanley also pointed out that Hong Kong stocks are in a "valuation recovery" stage and suggested that investors increase their allocation to Hong Kong stocks.
Hong Kong Stock Exchange data shows that the average daily trading volume of Stock Connect has increased by about 18% compared to the same period last year, indicating that mainland investors' attention to Hong Kong stocks continues to grow. At the same time, IPO activity for new economy companies has also picked up, with an expected 5-8 new economy enterprises expected to list on the Hong Kong stock market in the fourth quarter.
Future outlook: Allocation value of Hong Kong stocks further highlighted
Looking ahead, industry insiders generally believe that the Hong Kong stock market still has room for growth. First, from a valuation perspective, the Hang Seng Index's P/E ratio is about 10.5 times, still below the historical average, showing significant valuation advantages. Second, as China's economy continues to recover, corporate earnings are expected to further improve, providing support for stock prices.
From an industry allocation perspective, technology, consumption, and financial sectors will still be key areas of focus for institutions. The technology sector benefits from the acceleration of digital transformation and prospects for artificial intelligence development; the consumption sector is expected to benefit from the recovery of domestic demand; while the financial sector benefits from improving interest rate environments and asset quality improvements.
In terms of risks, investors still need to pay attention to the impact of global monetary policy changes, geopolitical risks, and China-US relations on the market. However, overall, driven by dual advantages of low valuation and policy support, the Hong Kong stock market is expected to maintain a stable performance.
For individual investors, it is recommended to adopt a "core + satellite" investment strategy, that is, allocate core blue-chip stocks for long-term holding, while appropriately paying attention to high-growth technology stocks and value stocks with valuation advantages. In addition, participating in Hong Kong stock investment through Stock Connect ETFs can also help diversify individual stock risks.
Overall, the strong start to Hong Kong stocks in October has injected strong confidence into the market. Supported by multiple favorable factors, the Hong Kong stock market is expected to welcome a "golden October" rally. Investors can grasp structural opportunities, adjust their investment portfolios in a timely manner, and share in the upside of the Hong Kong stock market.
