[ET Net News Agency, 24 February 2026] Mounting fears of a renewed tariff war,
compounded by another research report promoting the AI replacement narrative, dragged all
three major US indices down more than 1%. As southbound capital flows resumed, the Hang
Seng Index opened below 27,000, with technology and Chinese financial shares plunging
intraday, and a sudden collapse in pharmaceutical stocks just before midday. By the
half-day close, the HSI was down over 500 points, ending the session at 26,558, a loss of
523 points or 1.9%. The Hang Seng China Enterprises Index fell 190 points (2.1%) to 9,007,
while the Hang Seng Tech Index lost 127 points (2.4%) to 5,258.
Southbound funds saw mixed, directionless flows on the first day after the break,
recording a net outflow of over HKD 1.2 billion. Half-day main board turnover neared HKD
138.7 billion.

"Jaseper Tsang: HSI expected to range trade, support seen at 26,300"

Despite surging more than 600 points to reclaim 27,000 yesterday, the HSI sharply
reversed today even as A-shares opened the Year of the Horse with gains. Jaseper Tsang,
Vice-Chairman of the Hong Kong Institute of Financial Analysts and Professional
Commentators Limited, told ET Net News Agency that while the US Supreme Court's recent
decision to overturn US President Trump's wide-reaching tariff policy initially boosted
Hong Kong equities, Trump's immediate move to propose new tariffs, albeit at lower rates
than before, means yesterday's rally was largely a technical rebound driven by short
covering. Notably, yesterday's high failed to break above the HSI's current downtrend from
the 20,856 peak, which lies near 27,300, and turnover for the day was below HKD 200
billion amid absent southbound funds. As a result, there was no clear signal of a
sustained upside breakout.
Tsang explains that the HSI's direction in coming days hinges on whether positive
policies emerge from next month's Two Sessions, and on further developments in US-Iran
relations. For now, Hong Kong remains a stock picker's market, with AI-related names and
local property shares still showing relative strength. Tsang expects short-term volatility
to continue, with a key support level near the 100-day moving average at 26,300, which
also marks support for the HSI's prior uptrend from 25,086 to 28,056. Even if the HSI
tests 26,300, it does not guarantee further downside; it will be important to see whether
the index can find support and stabilize within the next couple of sessions, with trading
likely to be range-bound between 26,300 and 27,300 in the near term.

"Two Sessions to advance 15th five-year plan, but gains for autos and F&B seen as limited"

The fourth session of the 14th Chinese People's Political Consultative Conference will
convene in Beijing on 4 March, followed by the National People's Congress starting 5
March. Tsang expects the central government to remain focused on pushing forward with the
15th Five-Year Plan. Key areas of market attention will be further development in AI and
robotics, as well as potential measures to boost domestic demand, such as further tax
relief or extension of "trade-in" incentives.
For the "trade-in" replacement scheme, appliances and autos could be the main
beneficiaries, with appliance stocks likely to gain more. Notably, Midea Group (00300) not
only commands a leading position in home appliances but is also seen as an emerging
robotics play, a dual-policy beneficiary. However, Tsang notes, the benefits for autos may
be limited given the sector's high penetration and fierce competition, with intense
involution now the norm. Although trade-in policies could offer short-term relief, they
are not expected to reverse the dominant competitive landscape.
For other domestic demand sectors such as catering, Tsang does not rule out the rollout
of consumer vouchers, but highlights that these measures are small compared to the vast
size of China's consumer market. With no clear end to the slide in housing prices, new
home prices in 70 major cities fell over 3% year-on-year in January, the steepest drop in
seven months, consumer confidence is further constrained. Since property typically
accounts for around 70% of a household's net assets, falling prices and stagnant wealth
weigh on the ability and willingness to spend, making a turnaround in domestic consumption
unlikely in the short term.