Since February, the Hong Kong stock market has generally underperformed, especially with the HSTECH, which is a core asset, performing the worst, according to a CICC report.

As of February 28, the HSI fell by 2.8%, while the Shanghai Composite Index rose by 1.1%, and the S&P 500 fell by 0.9%. The HSTECH plummeted by 10.1%, with the STAR 50 and Nasdaq falling by 1.4% and 3.4%, respectively.

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Since the peak in October, the HSTECH has retraced 20% and has consecutively broken multiple technical support levels. The contrast was even more pronounced when compared to South Korea's nearly 50% gain since the beginning of the year.

Looking ahead to 2026, it will be challenging for the capital environment of the Hong Kong stock market to surpass 2025, and it is likely to underperform A-shares. The reason is that compared to the net inflow of RMB807.9 billion in 2024, the net inflow of RMB1.4 trillion in 2025, which is larger than 2024, was mostly contributed by ETFs, about RMB300 billion, and other trading funds such as private equity and individual investors.

As these two types of funds are directly related to market sentiment fluctuations, unless the market performs way beyond expectations, it will be difficult for capital to exceed last year's significantly.

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