Hong Kong stocks rallied sharply on Wednesday as investors shrugged off concerns over a record wave of post-IPO lock-up expiries, easing fears that a flood of newly tradable shares would trigger widespread selling across the market.
The benchmark Hang Seng Index rose 3%, while the Hang Seng Tech Index outperformed with a gain of about 5% as technology stocks led the advance. The rebound marked one of the market’s strongest sessions in weeks and reflected growing confidence that investors were willing to absorb additional share supply without significant disruption.
Artificial intelligence companies spearheaded the rally. Knowledge Atlas Technology, better known as Zhipu AI, climbed 13.4% despite reaching its first major post-listing lock-up expiry. Fellow AI startup MiniMax, which faces its own sizeable lock-up expiry later this week, gained 12%, signalling that investors remained optimistic about the sector’s long-term prospects.
The positive sentiment spread across Hong Kong’s broader technology sector. Alibaba surged more than 12%, Xiaomi advanced 9%, Baidu added 6.4% and JD.com gained 4% as investors returned to growth stocks after weeks of caution surrounding share unlocks and geopolitical uncertainty.
Lock-up expiries are closely watched because they allow early investors, founders and cornerstone shareholders to sell shares that were previously restricted following an initial public offering. Such events often increase the supply of shares in the market and can weigh on prices if investors rush to take profits after strong listing gains.
That scenario failed to materialise this week. Analysts attributed the market’s resilience to strong institutional demand and indications that several cornerstone investors intended to retain their holdings rather than immediately sell. The willingness of long-term shareholders to stay invested helped reassure the market that additional supply could be absorbed without undermining valuations.
The rebound also suggested improving confidence in Hong Kong’s initial public offering market, which has experienced renewed activity this year following a prolonged slowdown. Investors have become increasingly selective, favouring companies with strong growth prospects, particularly those linked to artificial intelligence and advanced technology.
Despite the rally, analysts cautioned that volatility could persist as more lock-up periods expire in the coming weeks. July is expected to see a record volume of previously restricted shares become eligible for trading, making investor appetite a key factor in determining whether Hong Kong’s stock market can sustain its recent recovery. While Wednesday’s performance eased immediate concerns, market participants remain alert to further share unlocks and their potential impact on liquidity and valuations.
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