Affected by overseas risk-off sentiment, Hong Kong stocks weakened with a sluggish performance throughout the day. By the close, the Hang Seng Index and Hang Seng Tech Index fell 0.92% and 1.8%, respectively. Leading tech stocks declined collectively, with Alibaba-W and Xiaomi Group-W dropping nearly 3%, while Tencent Holdings and Meituan-W slid over 1%. Kuaishou-W plunged nearly 6%. Southbound capital actively bought the dip, recording a net inflow of HK$7.523 billion for the day, with Xiaomi Group-W attracting HK$987 million in net purchases.

The HK Internet ETF (513770), heavily weighted in internet leaders, opened lower and extended losses, with its intraday price dropping over 3% before closing down 2.89%, testing the half-year moving average. Frequent intraday premiums indicated strong dip-buying demand.

Data from the Shanghai Stock Exchange shows the ETF saw a net inflow of 137 million yuan in a single day, accumulating 976 million yuan over the past 10 days.

On the macro front, dovish remarks from Fed officials revealed internal disagreements over future rate cuts, dampening market sentiment. CME's FedWatch Tool indicates a 70.6% probability of a 25-basis-point rate cut in December. Analysts suggest external liquidity uncertainty may lead to short-term volatility in Hong Kong stocks. However, in the medium to long term, as the U.S. rate-cut cycle begins and Fed balance sheet reduction concludes, synchronized easing policies between China and the U.S. could drive capital inflows into Hong Kong’s undervalued market.

In industry news, Alibaba CEO Wu Yongming announced at the World Internet Conference that the company is building a large-scale AI infrastructure and ramping up investments in a super AI cloud to provide global developers with cutting-edge AI services.

The AI wave is reshaping the core investment thesis for internet giants, shifting focus from user growth and business models to AI-driven growth opportunities. Meanwhile, after recent corrections, Hong Kong’s internet sector valuations appear attractive. As of November 6, the CSI HK Internet Index’s P/E ratio stood at 24.68x, near the 24th percentile of its 10-year range—significantly lower than the Nasdaq 100 (36.25x) and ChiNext Index (41.43x).

CITIC Securities highlights that global AI computing demand is surging, and Hong Kong—home to China’s core AI assets—could benefit directly. Guotai Junan Securities notes that the ChiNext Index’s outperformance over Hang Seng Tech has peaked, suggesting a potential Q4 style rotation favoring undervalued growth sectors like internet stocks.

The HK Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) track the CSI HK Internet Index, which is heavily concentrated in leaders like Alibaba-W (19.22%), Tencent (16.46%), and Xiaomi-W (10.41%). Its top 10 holdings, spanning AI models and sector applications, account for over 73% of the portfolio.

With assets exceeding 11.8 billion yuan and average daily turnover above 600 million yuan, the ETF supports intraday T+0 trading without QDII quota constraints.

*Caution: Recent volatility may persist. Investors should assess risk tolerance and manage positions prudently.*

*Data: The CSI HK Internet Index’s annual returns: 2020 (+109.31%), 2021 (-36.61%), 2022 (-23.01%), 2023 (-24.74%), 2024 (+23.04%). Past performance does not indicate future results.*

*Risk Disclosure: The ETF tracks the CSI HK Internet Index (base date: 2016.12.30; launched 2021.1.11). Constituent stocks are adjusted per index rules. Holdings shown are illustrative and not investment advice. The fund is rated R4 (higher risk) for aggressive investors (C4+). Performance of other funds does not guarantee future returns. Investment involves risks.*