Hang Seng Index Fluctuates Upward, Breaks Through 25,800 Points in September; Southbound Funds Accelerate Allocation to Technology and New Energy Sectors
On September 23, 2026, the Hang Seng Index (HSI) fluctuated upward, closing at 25,800 points, up 1.2% from the previous trading day, successfully breaking through the key 25,800-point resistance level. On the day, technology and new energy sectors led the market's gains, with the Hang Seng Tech Index surging 3.5% and the New Energy sector index rising 2.8%, driving the HSI back into an upward channel. Southbound funds net bought HK$12 billion on the day, with a cumulative inflow of HK$80 billion for September, indicating that mainland investors' confidence in the HK stock market is continuously strengthening.
From a technical perspective, after the HSI broke through 25,800 points, the next resistance level is at 28,000 points, formed by the high in December 2025, while the support level is at 25,500 points, provided by the 50-day moving average. The MACD indicator shows the DIFF line crossing above the DEA line (a golden cross) with red bars continuing to expand, indicating that bullish momentum is dominant. The KDJ indicator has entered the overbought zone but has not shown divergence, suggesting that upward momentum is still strong. If it can break through 28,000 points subsequently, the HSI could challenge the 30,000-point mark; if it encounters resistance, it may pull back to around 25,500 points to find support.
Fund Flow Tracking: Southbound Funds Accelerate Allocation to Technology and New Energy
Southbound funds are an important source of incremental capital for the HK stock market. Since September, Southbound funds have continued to flow in, with daily net purchases exceeding HK$10 billion on multiple occasions. According to HKEX data, from September 1 to 23, Southbound funds have net bought a total of HK$80 billion, with technology and new energy sectors being the main areas of inflow. Specifically, Tencent Holdings (0700.HK) net bought HK$3 billion on the day, Alibaba (09988.HK) net bought HK$2.5 billion, BYD (1211.HK) net bought HK$2 billion, and CATL (300750.SZ) net bought HK$1.5 billion. The inflow into these individual stocks drove the sector's gains.
- Tech Stocks: The Hang Seng Tech Index has risen 8.5% since September, with Tencent Holdings up 12%, Alibaba up 10%, and Meituan (03690.HK) up 9%. These companies benefit from the recovery of China's digital economy and the acceleration of AI commercialization, improving earnings expectations and attracting fund inflows.
- New Energy Sector: The Hang Seng New Energy Index has risen 6.2% since September, with BYD up 15%, CATL up 8%, and XPeng (09868.HK) up 7%. Benefiting from the growth in global demand for new energy vehicles and support from China's new energy policies, the sector's valuation has seen significant recovery.
Industry Analysis: HK Stocks' Valuation Attractiveness Highlights Global Capital Rebalancing
The recent rally in the HK stock market, besides being driven by fund flows, is also due to its attractive valuation. Compared to A-shares and US stocks, the PE (price-to-earnings) and PB (price-to-book) ratios of HK stocks are at historical lows. As of September 23, the HSI's PE is 10.5x, lower than A-shares' 15x and US stocks' 20x; the HSI's PB is 1.2x, lower than A-shares' 1.5x and US stocks' 3x. The low valuations make HK stocks attractive to global capital, especially mainland and overseas institutional investors.
Global capital rebalancing is another key factor. So far this year, the US Federal Reserve has maintained high interest rates, leading to overvalued US stocks, while China's economy recovers. HK stocks, as an important proxy for China's economy, its valuation advantage is gradually becoming apparent. In addition, the optimization of the mutual market access (Stock Connect) also enhances the appeal of HK stocks, for example, the upgrade of the Stock Connect trading rules, allowing mainland investors to purchase more HK stocks via Stock Connect, extending trading hours to 10 PM, and reducing transaction fees to 0.1%. These measures make it easier for mainland investors to participate in the HK stock market.
Key Technical Signals: Battle for 28,000 Points Begins
From a technical perspective, the HSI's trend shows a pattern of fluctuating upward movement. In late August, the HSI broke through 26,500 points, hitting a new high for the year, and then pulled back to 25,000 points before rebounding to 25,800 points in September. Currently, the HSI is in an upward channel, with a resistance level at 28,000 points, formed by the high in December 2025, and is a key psychological level. If it can break through 28,000 points, the HSI could challenge the 30,000-point level, as 30,000 points was the high in 2024, breaking through could open up new room for further gains.
The support level is at 25,500 points, provided by the 50-day moving average. The 50-day moving average is an important indicator of the short-term trend. If the HSI pulls back to around 25,500 points, the 50-day moving average will provide support, attracting buying interest. Additionally, the 250-day moving average (annual line) is at 24,000 points, and is a support level for the long-term trend. If the HSI falls below 25,000 points, it could enter a bear market, but this possibility is currently low.
The MACD indicator shows the HSI's DIFF line crossing above the DEA line (a golden cross) with red bars expanding, indicating that bullish momentum is dominant. The KDJ indicator has entered the overbought zone but has not shown divergence, suggesting that upward momentum is still strong. If the KDJ indicator shows divergence subsequently, it may signal a pullback, but currently, the bulls are still in control.
Performance of Hot Stocks: Tech and New Energy Lead the Gains
Tech stocks are the main driver of the HSI's gains, with Tencent Holdings and Alibaba performing particularly well. Tencent Holdings has risen 12% since September, benefiting from the stable growth of its WeChat ecosystem and the recovery of its gaming business, improving earnings expectations. Alibaba is up 10%, benefiting from the growth of its e-commerce business and the expansion of its cloud computing business, with earnings exceeding expectations. Meituan is up 9%, benefiting from the recovery of its local life services, with significant growth in order volume.
In the new energy sector, BYD is up 15%, hitting a new all-time high, benefiting from the growth in global demand for new energy vehicles and support from China's new energy policies, with capacity expansion and sales growth driving its stock price higher. CATL is up 8%, benefiting from the growth in battery demand and technological advancements, and increasing market share. XPeng is up 7%, benefiting from the launch of new models and upgrades to its autonomous driving technology, with growing order volume.
Investor Strategy: Focus on Breakout Opportunities and Pullback Buying
For short-term investors, they can focus on the opportunity for the HSI to break through 28,000 points and add to positions if it breaks through, or wait for a pullback to around 25,500 points to buy. For long-term investors, they can focus on low-valuation, high-growth sectors, such as technology and new energy, as well as dividend-paying HK stocks, such as HSBC Holdings (00005.HK), which has a dividend yield as high as 6%, making it an ideal choice for long-term investment.
It should be noted that the HK stock market is quite volatile, and investors should control their position sizes and avoid excessive leverage. Additionally, they should pay attention to macroeconomic data, such as China's GDP growth, US Federal Reserve policy, and global economic data, as these factors will affect the HK stock market's trend. For example, if China's economic data improves, the HK market may continue to rise; if the US Federal Reserve maintains high interest rates, US stocks may pull back, which in turn could affect HK stocks.
In summary, the HSI fluctuated upward in September, breaking through 25,800 points, as Southbound funds accelerated their allocation to technology and new energy sectors. Technical analysis shows that bullish momentum is dominant, and industry analysis highlights the attractive valuation of HK stocks. Investors should focus on breakout opportunities and pullback buying to seize trading opportunities in the HK market.
