Mainland Chinese investors increased their holdings of Hong Kong stocks for the fourth consecutive month, with net purchases totaling HKD 60.8 billion in September.

Mainland Chinese investors net bought HK$60.8 billion (US$7.7 billion) in Hong Kong stocks through Stock Connect in September, marking the fourth consecutive month of inflows and a significant acceleration from August's HK$10.4 billion, according to Wind data. Total net purchases in the third quarter reached HK$134.1 billion.

Investors primarily focused on technology stocks, especially AI model developers. Chinese AI model developer Z.ai (Zhipu AI) attracted HK$6.94 billion in inflows, while Baidu and Tencent Holdings drew nearly HK$6 billion and HK$3 billion, respectively. Healthcare stocks recorded the largest outflows, with SMIC seeing net selling of HK$6.4 billion.

Despite high US Treasury yields and oil prices, Hong Kong stocks remained relatively resilient, with the Hang Seng Index falling 3.7% in September, compared to a nearly 6% drop in China's CSI 300 Index. Kenneth Wu, an analyst at ICBC International, stated that the rebound momentum in Hong Kong stocks is strengthening, but escalating US-Iran negotiations and weak Chinese consumption data are risk factors. Investment banks expect Hong Kong stocks to face challenges in the fourth quarter, with the Hang Seng Index potentially fluctuating between 22,500 and 26,000 points.