Hang Seng Edges Up as GigaDevice Profit Jumps 1091% in Mainland China

Chinese markets recorded a mixed session; the Hang Seng Index in Hong Kong closed up 0.07% at 25,471 points, while the Hang Seng Tech Index fell 0.9% alongside declines in AI, large language model, and select chip stocks.

On the individual stock front, Alibaba shares jumped 3.7%, while Zhipu stock plunged 13.3%. On the mainland, GigaDevice announced a 1,091.5% YoY surge in net profit for the first half, while the Shanghai Stock Exchange suspended the accounts of traders involved in illegal trading in Aili Home stock.

Regarding liquidity, the Chinese central bank conducted overnight reverse repo operations worth 327.4 billion yuan, while refraining for the seventh consecutive time from 7-day reverse repos, resulting in a net liquidity drain of 142.3 billion yuan, signaling policy neutrality rather than easing.

The NASDAQ Golden Dragon China Index fell 1% overnight, and FTSE China A50 futures dropped 0.32%. In a broader context, the divergence—real estate and innovative pharmaceuticals rising against declines in AI stocks—indicates that capital is reallocating across sectors rather than exiting the market entirely. This is not a retreat — this is rotation.

What do these terms mean?

Reverse Repo: A tool used by the central bank to inject or drain liquidity; injecting increases funds available to banks, while draining reduces them.

Liquidity Neutrality: A stance in which the central bank keeps the volume of liquidity largely unchanged, avoiding both easing and tightening.

Golden Dragon China Index: A U.S. index tracking Chinese companies listed on U.S. exchanges, reflecting foreign investor sentiment toward Chinese markets.