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Hong Kong Slides On Lack of Mainland Buyers

Hong Kong Slides On Lack of Mainland Buyers

Posted February 20, 2026 at 10:30 am

Brendan Ahern
KraneShares

Key News

Asian equities ended the week mixed as Middle East tensions weighed on risk sentiment and the US dollar strengthened. Taiwan and South Korea did not seem to mind, as both markets ripped higher. Meanwhile, Mainland China, Taiwan, and Vietnam remain closed for the Lunar New Year holiday.

Hong Kong reopened following Monday’s half day with a thud, led lower by growth stocks. Tencent fell -2.06% despite its Yuan Bao large language model (LLM) reaching 50 million daily average users (DAUs). Alibaba fell -4.91% despite its Qwen LLM assisting in 130 million E-Commerce orders during the holiday. Xiaomi fell -3.55%, Baidu fell -6.25%, CATL fell -1.03%, and BYD fell -2.4%, all underperforming the broad market.

Volumes were exceedingly light, while value stocks, such as banks and oil, managed small gains. The downdraft may indicate that foreign investors are using Hong Kong-listed large cap technology stocks as the funding source for purchases in other markets. This was further evidenced by non-benchmark AI plays bucking the growth downdraft, as recent IPOs Minimax and Knowledge Atlas gained +14.52% and +42.72%, respectively. I would avoid reading too much into such a light volume day, though the move is disappointing, especially as there was some positive news overnight.

Robotic stocks had a strong day. Robosense gained +9.24% after announcing that its 2026 loss will decline significantly. This was following the impressive dancing robots featured in the CCTV New Year’s Gala, which is one of the most-watched television events in China, akin to the Super Bowl in the US. Privately-held humanoid robotics firm Unitree announced it will sell 10,000 humanoids in 2026, as it prepares for a potential IPO.

Healthcare managed to buck the growth downdraft as well.

Southbound Stock Connect remains closed until Tuesday’s Mainland reopening. Buyers from the Mainland, coming in through the access program, would usually provide support to a downdraft like today. But, sadly they were absent due to the holiday.

The Ministry of Commerce (MoC) announced that holiday sales in 78 business districts improved 4.5% to 4.8% from last year. Meanwhile, social media was flooded with images and video of huge crowds at tourist sites.

We also had two interesting developments in US-China relations. The US Department of Defense (DoD) pulled the inclusion announcement of Alibaba, Baidu and BYD from their no-procurement list. Meanwhile, the Wall Street Journal reported that President Trump will tap the brakes on the next round of military goods sales to Taiwan. Why? Clearly, he wants his April trip to go well! 

A China report from the International Monetary Fund (IMF) garnered significant negative attention from the media overnight. Having read it myself, I did not find it remotely as negative as the headlines would suggest. As they say in the media industry, “if it bleeds, it leads”.

Enjoy your weekend!

Cover image courtesy of CGTN

Last Night’s Performance

Country / IndexTicker1-Day Change
China (Hong Kong)HSI Index-1.1%
Hang Seng TechHSTECH Index-2.9%
Hong Kong TurnoverHKTurn Index94.6%
Hong Kong Short Sale TurnoverHKSST Index105.5%
Short Turnover as a % of Hong Kong TurnoverN/A23.8%
Southbound Stock Connect Net Buy/Sell (US $ Millions)N/AClosed
China (Shanghai)SHCOMP IndexClosed
China (Shenzhen)SZCOMP IndexClosed
China (STAR Board)Star50 IndexClosed
Mainland Turnover.chturn IndexClosed
JapanNKY Index-1.1%
IndiaSENSEX Index0.4%
IndonesiaJCI Index0%
MalaysiaFBMKLCI Index0%
PakistanKSE100 Index1.2%
PhilippinesPCOMP Index0.9%
South KoreaKOSPI Index2.3%
TaiwanTWSE IndexClosed
ThailandSET Index-1%
SingaporeSTI Index0.3%
AustraliaAS51 Index-0.1%
VietnamVNINDEX IndexClosed

Past performance is not indicative of future returns.

IndicatorHong KongMainland China
Today’s Volume % of 1-Year Average63Closed
Advancing Stocks185Closed
Declining Stocks309Closed
Outperforming FactorsDividend YieldClosed
Underperforming FactorsGrowth, EPS Revision, LiquidityClosed
Top SectorsHealthcare, Energy, IndustrialsClosed
Bottom SectorsDiscretionary, Tech, CommunicationClosed
Top SubsectorsPetroleum, Building, Commercial ServicesClosed
Bottom SubsectorsConsumer Staples Distribution, Consumer Discretionary Distribution, Media/EntertainmentClosed
Southbound Connect BuysClosedN/A
Southbound Connect SellsClosedN/A

Past performance is not indicative of future returns.

MSCI China All Shares Index# of StocksAverage 1-Day Change (%)
Hong Kong Listed165-1.71
Communication Services11-2.61
Consumer Discretionary28-3.16
Consumer Staples13-2.4
Energy61.19
Financials250.15
Health Care161.56
Industrials220.24
Information Technology12-3.13
Materials14-1.19
Real Estate7-0.81
Utilities110
Mainland China Listed386Closed
Communication Services8Closed
Consumer Discretionary26Closed
Consumer Staples19Closed
Energy12Closed
Financials64Closed
Health Care31Closed
Industrials58Closed
Information Technology95Closed
Materials52Closed

Past performance is not indicative of future returns.

US & Hong Kong Dually ListedTicker1-Day Change (%)
Tencent HK700 HK Equity-2.1
Alibaba HK9988 HK Equity-4.9
JD.com HK9618 HK Equity-2
NetEase HK9999 HK Equity-4.3
Yum China HK9987 HK Equity0.8
Baozun HK9991 HK Equity0
Baidu HK9888 HK Equity-6.3
Autohome HK2518 HK Equity0
Bilibili HK9626 HK Equity-5.3
Trip.com HK9961 HK Equity-1
EDU HK9901 HK Equity0.9
Xpeng HK9868 HK Equity-2.6
Weibo HK9898 HK Equity-2
Li Auto HK2015 HK Equity-2.8
Nio Auto HK9866 HK Equity-1.6
Zhihu HK2390 HK Equity-0.9
KE HK2423 HK Equity-2.6
Tencent Music Entertainment HK1698 HK Equity-5.5
Meituan HK3690 HK Equity-1.6

Past performance is not indicative of future returns.

Hong Kong’s Most Heavily Traded by Value1-Day Change (%)
TENCENT HOLDINGS LTD-2.1
ALIBABA GROUP HOLDING LTD-4.9
MINIMAX GROUP INC14.5
XIAOMI CORP-CLASS B-3.5
KNOWLEDGE ATLAS TECHNOLOGY-H42.7
BAIDU INC-CLASS A-6.3
AIA GROUP LTD-0.1
MEITUAN-CLASS B-1.6
TRIP.COM GROUP LTD-1
NETEASE INC-4.3

Past performance is not indicative of future returns.

Last Night’s Exchange Rates, Prices, & Yields

Mainland China’s fixed income, currency, and commodity markets were closed overnight.

Originally Posted February 20, 2026 – Hong Kong Slides On Lack of Mainland Buyers

Author Positions as of 2/20/2026 are KLIP, KBA, KEMQ, KWEB, KHYB, KSTR

Charts Source: KraneShares

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