On the first trading day after the May Day holiday, with mainland China's A-share market still closed and the Stock Connect trading channel suspended, Hong Kong stocks staged a catch-up rally alongside broader Asia-Pacific markets. The Hang Seng Index surged more than 500 points intraday before paring gains toward the close, ultimately holding firmly above the 26,000-point threshold. Technology stocks and artificial intelligence (AI) concept plays served as the primary drivers, with Xiaomi Corporation jumping over 6% to lead the blue-chip advance after its sales outlook drew bullish assessments from foreign brokerages.
The Hang Seng Index opened sharply higher by 361 points on Monday (May 4), with buying momentum continuing to build, pushing the benchmark to an intraday high of 26,326 — a gain of 549 points or 2.1%. However, lacking the liquidity injection from southbound Stock Connect flows, the market's appetite for chasing prices turned cautious, causing gains to gradually narrow during the afternoon session. The index ultimately settled at 26,095, up 319 points or 1.2%. The Hang Seng China Enterprises Index rose 92 points, or 1.1%, to 8,774, while the tech-heavy Hang Seng Tech Index outperformed with a 105-point, or 2.2%, advance to 4,976.
On the turnover front, trading activity was curtailed by the mainland holiday closure of Stock Connect. Full-day main-board turnover shrank to HK$176.98 billion (approximately $25.9 billion), a nearly 40% contraction compared to the April daily average of around HK$253.4 billion (approximately $37.1 billion). This indicated that while foreign and local capital actively fanned the flames, overall market depth remained constrained by holiday conditions.
Xiaomi Surges Over 6% as Foreign Brokerages Applaud Smartphone Margin Outlook
Heavyweight technology stocks advanced broadly. Xiaomi (01810.HK) emerged as the standout performer of the day, surging 6.8% to close at HK$30.98. Bank of America Securities noted in a report that it sees potential for Xiaomi's first-quarter smartphone gross margin to beat market expectations, spurring aggressive buying interest. Alibaba Group (09988.HK) followed closely with a 4.5% rally, reflecting market anticipation regarding developments following its restructuring. Tencent Holdings (00700.HK) and Meituan (03690.HK) closed up 1.1% and 1.4%, respectively.
Baidu (09888.HK) and Kuaishou Technology (01024.HK) showed strong momentum, rising 3.5% and 3.6% respectively. Market reports indicated that weekly API call volumes for China's large AI models have once again surpassed those of the United States, with Tencent's Hunyuan 3 free preview version ranking first in model call volume — a data point that injected a strong dose of confidence into AI-related concept stocks.
AI Computing Power Plays Heat Up; Data Center and Semiconductor Stocks Surge
Bank of America Securities raised its capital expenditure forecast for global hyperscale cloud computing enterprises to over $800 billion, a heavyweight projection that immediately ignited data center power supply and related concept stocks in the Hong Kong market. Weichai Power (02338.HK) soared 12%, emerging as one of the session's strongest names. Environmental energy stocks also benefited in sympathy, with China Longyuan Power (00916.HK) climbing 4.1%, while Goldwind Science & Technology (02208.HK) and Xinyi Solar (00968.HK) both gained over 5%.
Optical communications and semiconductor names were equally buoyant. Yangtze Optical Fibre and Cable (06869.HK) surged 12.5%, while optical communication concept stock Xizhi Technology (01879.HK) jumped over 15%. In chip manufacturing, Hua Hong Semiconductor (01347.HK) rose 6%, and Tianshu Zhixin (09903.HK) was bid up by 20%. AI software and platform stocks also joined the fray, with MiniMax (00100.HK) and Manycore (00068.HK) soaring 13% and 19% respectively, while Zhipu (02513.HK) closed 10% higher.
Apple Concept and Auto Stocks Diverge; Oil and Gaming Face Headwinds
Apple Inc. shares rose following its earnings release, lending strength to Hong Kong-listed handset component suppliers. AAC Technologies (02018.HK) and Sunny Optical Technology (02382.HK) gained 4.5% and 3.8% respectively, while Q Technology (01478.HK) jumped 6.1%.
Automobile stocks saw a more bifurcated performance. BYD Company (01211.HK) announced that April new energy vehicle sales rose 7% month-over-month, nudging its shares 0.5% higher. Li Auto (02015.HK) rose 3.8%, and XPeng (09868.HK) added 2.5%. However, NIO (09866.HK) gave back 2.4% despite reporting a 23% year-over-year increase in April deliveries. Battery giant Contemporary Amperex Technology (CATL) (03750.HK) continued to attract buying interest following its Hong Kong listing, closing 3.9% higher.
Among traditional blue chips, financial stocks performed steadily. HSBC Holdings (00005.HK) rose 2.3% ahead of its first-quarter results announcement. AIA Group (01299.HK) and Hong Kong Exchanges and Clearing (HKEX) (00388.HK) closed 1.1% and 0.6% higher, respectively. Notably, HKEX is preparing to relaunch gold futures trading in the coming months. Market head Wilfred Yiu told a Legislative Council committee meeting that the exchange will consult market participants and stakeholders to optimize contract design and enhance mechanisms.
Stocks bucking the trend were concentrated in the oil, coal, and gaming sectors. Affected by a slight softening in international crude prices during Asian trading hours, CNOOC Limited (00883.HK) and PetroChina (00857.HK) fell 2.6% and 2.7% respectively. Among gaming stocks, Galaxy Entertainment Group (00027.HK) slid 2.8%, while MGM China Holdings (02282.HK) and Melco International Development (00200.HK) both dropped over 3%.
Mainland Property and Airlines Take Flight; Market Eyes HSBC Results
Mainland Chinese property stocks staged a notable rebound on Monday. Property agency platform KE Holdings (Beike) (02423.HK) surged 6.6%, while China Overseas Land & Investment (00688.HK) and China Vanke (02202.HK) closed 3.9% and 5.7% higher, respectively. Airline stocks also rose across the board amid robust holiday travel demand, with Air China (00753.HK) soaring nearly 6%, and China Eastern Airlines (00670.HK) and China Southern Airlines (01055.HK) both climbing over 4%.
Looking ahead, analysts noted that Hong Kong equities remain attractively valued, with medium- to long-term prospects continuing to look positive. The Hang Seng Index could recover to the 27,000-28,000 range by year-end, with 25,000 seen as a strong technical support level. In the near term, the market will keenly focus on HSBC Holdings' upcoming first-quarter results, which are expected to provide critical directional guidance for financial stocks and the broader market. With A-shares remaining closed on both Monday and Tuesday and lacking northbound liquidity support, Hong Kong trading volumes may remain under pressure in the short term, though structural themes such as technology and AI are likely to maintain a rotational pattern.
On the individual stock front, a brokerage initiated coverage on JD Health International (06618.HK) with a target price of HK$50.5 and a stop-loss at HK$44.0; the stock closed at HK$46.0 on Monday. Pharmaceutical stocks were mixed, with WuXi Biologics (02269.HK) gaining 4.6% and Hengrui Medicine (01276.HK) rising 3.7%, while Akeso (09926.HK) bucked the trend with a 5.8% decline and Junshi Biosciences (01877.HK) also retreated 4.3%.
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