Hong Kong tech stocks short-selling battle intensifies; Xiaomi Group's five-day short sale volume surges nearly 90%

Caixin Insight, April 2 (Edited by Hu Jiarong) In recent weeks, the Hong Kong stock market has continued to show high volatility, with the trend repeatedly shifting and remaining uncertain. For example, yesterday the three major Hong Kong stock indexes rebounded collectively, but the following day they fell again. Among them, the technology index led the declines, reflecting that investors’ cautious sentiment toward the technology sector is still ongoing. As the bellwether of the market, the Hang Seng TECH Index’s performance has drawn the attention of the entire Hong Kong stock market.

In addition to the adjustment in the Hang Seng TECH Index, the short-selling situation of its constituent stocks cannot be ignored.

After Tencent Holdings’ short-selling data experienced a rapid drop in late March, it has recently resumed an upward trend. The data show that Tencent’s short-sold share count rose from 2.9645 million shares at the end of March to 3.6081 million shares on April 1, an increase of approximately 21.7%. Notably, however, in the same period the short-selling amount decreased from HK$3.040 billion to HK$1.798 billion, a drop of 40.9%. This divergence indicates that while the number of short positions increased, the size of each trade shrank, and market disagreements are growing.

Note: Tencent Holdings’ short-selling situation
Alibaba’s short-selling situation also shows an upward trend, though the increase is relatively mild. The short-sold share count rose from 11.6424 million shares at the end of March to 11.7745 million shares on April 1, a slight increase of 1.1%. Meanwhile, the short-selling amount fell from HK$1.766 billion to HK$1.446 billion, a drop of 18.1%. This change in the data suggests that although the number of shares held short increased slightly, the level of capital participation has declined, and market bearish sentiment toward Alibaba has not significantly worsened.

Note: Alibaba’s short-selling data
The short-selling data for Xiaomi Group shows the most significant change, indicating that market disagreement about this stock has reached its peak. The short-sold share count surged sharply from 31.5692 million shares on March 27 to 59.4576 million shares on April 1, an increase of as much as 88.3%. What is especially striking is that in the same period, the short-selling amount jumped from HK$1.036 billion to HK$1.9 billion, an increase of 83.4%. On April 2, this data further expanded: with a short-selling transaction amount of HK$2.245 billion, Xiaomi Group ranked second in the entire market, showing that short-seller strength is concentrating its efforts on this stock.

Note: Xiaomi Group’s short-selling data
A panoramic view of recent Hong Kong stock short-selling data

Looking from a broader time dimension, since the beginning of 2026, the short-selling activity in the Hong Kong stock market has been exhibiting a fluctuating upward trend. In March, the market experienced a notable pullback: the Hang Seng Index’s cumulative decline reached 7%, while the Hang Seng TECH Index performed even weaker, with a cumulative decline of 9.50% within the month. Against this backdrop, short-selling transactions have become an important risk management tool for investors.

Historical data show that from October 13, 2025 to January 8, 2026, the short-selling amount per day in the Hong Kong stock market had fallen sharply from HK$7.802 billion to HK$4.326 billion, a decline of 44.6%. But more recently, this trend has reversed. In mid-March, the market’s short-selling scale rose again. Tencent Holdings’ short-sold share count surged from 2.4538 million shares on March 17 to 8.3963 million shares on March 20, an increase of more than 240%, reflecting the rapid warming of market panic sentiment.

Southbound capital takes an opposite stance

In sharp contrast to the short-selling data, southbound capital has recently been showing a net inflow trend against the tide. According to related data, since February, southbound capital has accumulated net inflows of HK$90.575 billion. Among them, Hong Kong stock technology-themed ETFs recorded a net inflow of as much as HK$13.259 billion in a single week. Some Hang Seng TECH ETF products saw their shares surge by about 6 times within four months. This “buy more as prices fall” pattern indicates that institutional investors recognize the long-term value of the technology sector, forming a clear contrast with short sellers in the near term.