Hong Kong Stocks Slide as Xiaomi Buys Back $640,000 in Shares
Hong Kong stocks opened sharply lower on Friday, with the benchmark Hang Seng Index and the tech-heavy Hang Seng Tech Index both falling as much as 2% in early trading. The decline hit the city’s best-known technology names, as Alibaba and Xiaomi each dropped more than 3%, while Meituan, Baidu and JD.com all slipped over 2%. The sell-off echoed weakness in New York overnight, where the Nasdaq Golden Dragon China Index, which tracks US-listed Chinese companies, closed down 0.67%, with Alibaba, JD.com and Baidu all posting losses.
The broader US market offered little comfort. The Dow Jones Industrial Average fell 0.31%, the S&P 500 slipped 0.02%, and the Nasdaq Composite managed a gain of just 0.01%. Technology shares led the declines, with Nvidia, Apple and Microsoft all recording notable drops. Market participants pointed to rising US Treasury yields as a key source of pressure, as higher bond yields tend to make growth stocks — especially expensive technology names — less attractive relative to safer assets. For Hong Kong, which hosts many of China’s largest tech listings, that global risk-off mood translated quickly into selling.
Amid the gloom, Xiaomi moved to support its own stock. According to filings with Hong Kong Exchanges and Clearing, the smartphone and electric-vehicle maker repurchased 1.9 million Class B shares on Friday, spending about HK$50.1 million (roughly US$6.4 million). Share buybacks are a common tool for listed companies seeking to signal confidence and offset downward pressure on their share price. Xiaomi has been expanding aggressively beyond phones into electric vehicles and smart home devices, making it one of the more closely watched Chinese tech names among global investors.
The session was not uniformly negative for Chinese assets. Hong Kong Exchanges and Clearing announced that its derivatives clearing houses will begin accepting Chinese government bonds, policy bank bonds and Ministry of Finance bonds as non-cash collateral starting in November 2026. The bonds, held through the Bond Connect northbound channel, will be accepted by HKEX’s futures clearing and options clearing subsidiaries. The move is a incremental step in linking China’s huge bond market with global derivatives trading infrastructure, and it could make Hong Kong’s clearing system more attractive to international institutions holding Chinese debt.
Elsewhere in global markets, the US dollar weakened, with the dollar index slipping below the 101 mark, down 0.24% on the day. Spot silver climbed to touch US$65 an ounce, up 1.83%. Deutsche Bank cut its price target on PayPal to US$55 from US$60, reflecting caution on the payments sector. In Hong Kong corporate news, New World Department Store China issued a profit warning, saying it expects a loss attributable to shareholders of no more than about HK$780 million for the fiscal year ended June 30, 2026 — a swing from a profit of about HK$25.3 million a year earlier.
The pullback in Hong Kong shares comes after a strong run for Chinese equities over the past two years, which has left some investors questioning how much further the rally can go. For global readers, the takeaway is that Chinese technology stocks remain tightly linked to global risk appetite, US interest rates and the ebb and flow of money between New York and Asia. A single session’s decline does not necessarily signal a trend, but it shows how quickly sentiment can shift when yields rise and overseas markets wobble.
Whether the dip deepens or proves temporary will depend on several factors: the path of US Treasury yields, the next round of earnings from China’s tech champions, and whether Beijing introduces further measures to support markets. For now, investors are watching both the buyback activity from companies like Xiaomi and the broader macro backdrop. In a market as globally connected as Hong Kong’s, Friday’s slide was a reminder that local names rarely move in isolation.