The Hang Seng Index (HSI) advanced 2.3% last week, closing at 26,845 on Friday and capping a volatile period characterised by strong early-week gains that were partially eroded by regulatory concerns and profit-taking.
Healthcare companies continued to lead gains. Alibaba Health surged 17.9% on optimism surrounding artificial intelligence applications in healthcare, buoyed by reports that AI health assistant “Ant Afu” exceeded 30 million monthly active users shortly after launch, validating substantial market demand for AI-powered health services. Parent company Alibaba also gained 13.5% following upgrades to its Qwen AI application.
Regulatory intervention tempered sentiment mid-week as authorities launched an antitrust investigation into Trip.com over alleged abuse of market dominance and monopolistic practices. The online travel platform plummeted 21.8% during the week. Separately, Pop Mart retreated 9.3% following a China Labor Watch report alleging serious labour violations at a key Labubu supplier.
Beijing also implemented tighter margin financing requirements effective 19 January, aiming to curb excessive leverage as mainland turnover reached record levels. Despite this cooling measure, the PBOC’s signal that further reserve requirement ratio and policy rate reductions remain under consideration provided market support.
The HSI is currently establishing a foundation near 26,850 for its next advance towards the resistance zone around 27,000–27,300. The trend remains bullish as the 20-day simple moving average (SMA) has formed a golden cross with the 50-day SMA. The next rally phase would likely accelerate following three consecutive closes above 27,000. Any pullbacks should find support around 26,000.
Figure 2: Hang Seng Index (daily) price chart