Hong Kong stocks closed higher on July 28, with the Hang Seng Index rising 0.41% to 25,310.85 points, the Hang Seng Tech Index gaining 0.61%, and the H-share Index advancing 0.85%, as restaurant and technology stocks offset sharp declines in storage and semiconductor names. The selloff in chip-related sectors stemmed from multiple concerns including AI capital expenditure uncertainties, China semiconductor competition intensifying supply glut fears for Korean memory giants, and Google's second-quarter negative cash flow triggering a reassessment of AI infrastructure spending. Total market turnover reached HKD 250.63 billion, with the index exhibiting volatility throughout the session — opening higher at 25,440 points before dropping 132 points to test the 100-day moving average at 25,074 points, then recovering into the close.
Hang Seng Index Tests 100-Day Support Before Late Recovery
The Hang Seng Index opened higher on July 28, reaching an intraday peak of 25,440 points before storage and AI concept stocks triggered a reversal. The index dropped 132 points to 25,074 points, testing support at the 100-day moving average, before staging a modest rebound into the closing bell. The H-share Index outperformed with a 0.85% gain.
Restaurant and Technology Stocks Lead Sectoral Gains
The restaurant sector posted the session's strongest performance, with Xiaocaiyuan climbing over 5%. Analysts noted that June catering revenue data indicated the industry's weakest period has passed, with marginal data showing a moderate upward trend. Technology stocks remained active, with NetEase and JD.com each rising more than 4%, while Xiaomi gained approximately 2%. New energy vehicle stocks strengthened, with Leapmotor advancing 3.72% and Li Auto climbing 3.33%. Analysts attributed the EV sector's strength to high export growth, overseas localization progress, and catalysts from intelligent driving trends.
Storage and Semiconductor Stocks Plunge on AI Spending Concerns
Despite the broader market's gains, storage concept stocks and semiconductor names suffered heavy losses. South Korea 2x Leveraged Hynix plummeted over 30%, while South Korea 2x Leveraged Samsung Electronics dropped more than 26%. GigaDevice fell 17.36% and Montage Technology declined 13.79%. Analysts identified multiple overlapping concerns driving the chip stock selloff: financing pressure and capital flight, with the market worried about AI data center project funding stress and capital withdrawing from high-elasticity storage chains; technological breakthroughs and competition, as China's semiconductor advances and intense competition from domestic manufacturers deepened market expectations of oversupply for Korean memory duopoly; and AI expectation revision, triggered by Google's historic negative cash flow in the second quarter, prompting the market to correct previously elevated AI capital expenditure forecasts and raising concerns about "circular financing" risks.
PCB Sector and Individual Stocks Record Sharp Declines
PCB concept stocks weakened in tandem with the semiconductor selloff, with Kingboard Laminates falling over 16%, reflecting a market shift from trading "high prosperity" to focusing on capacity digestion and valuation normalization. Among individual stocks, Lao Pu Gold plunged 23.76%, while AI-related names including Zhipu and MiniMax each recorded declines exceeding 14%.
FAQ
What caused Hong Kong storage stocks to drop over 30% on July 28?
Storage stocks plummeted due to multiple concerns: AI data center financing pressures prompting capital flight from high-elasticity storage chains, China semiconductor technological breakthroughs intensifying competition and oversupply fears for Korean memory giants, and Google's second-quarter negative cash flow triggering a downward revision of AI capital expenditure expectations and raising "circular financing" risk concerns.
Why did the restaurant sector outperform Hong Kong stocks on July 28?
The restaurant sector led gains with Xiaocaiyuan rising over 5%, driven by June catering revenue data showing the industry's weakest period has passed and marginal data exhibiting a moderate upward trend, according to analysts cited in the source.
