FINANCE

Global ‘HALO’ Trade Drives Shift in Chinese Stocks Away From Tech

Published: Mar. 11, 2026 6:47 p.m. GMT+8

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Investors are rotating out of technology stocks and into traditional sectors in Chinese markets as the “HALO” — Heavy Assets, Low Obsolescence — trading strategy gains traction.

The shift has weighed on Hong Kong’s tech stocks. The Hang Seng Tech Index has trended lower since late January. In the week from March 2 to 6, the Hang Seng Index fell 3.3%, while the tech gauge dropped 3.7%. Energy and utilities rose 4.3% and 1%, respectively.

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Investors in Chinese markets are shifting from technology stocks to traditional sectors, following the HALO (Heavy Assets, Low Obsolescence) strategy.
The Hang Seng Tech Index dropped 3.7% and the broader Hang Seng Index fell 3.3% from March 2-6, while energy and utilities rose 4.3% and 1% respectively.
The sector rotation is driven by caution over AI, higher interest rates, and geopolitical tensions, with similar trends seen in both Hong Kong and mainland China.

AI generated, for reference only

Who’s Who

China Galaxy Securities Co. Ltd.: China Galaxy Securities Co. Ltd. indicates that the "HALO" (Heavy Assets, Low Obsolescence) investing trend, which favors sectors like oil, coal, and utilities, is spreading globally and influencing Hong Kong equities. This shift reflects caution over the AI boom, higher interest rates, and geopolitical tensions.

Alibaba: Alibaba, a Hong Kong-listed company, has seen its shares decline since January. Despite the broader trend of investors moving away from technology stocks due to the "HALO" trading strategy, some analysts suggest Chinese internet platform companies like Alibaba might be less vulnerable to AI disruption compared to U.S. software firms. This is because many of them depend on offline operations, including logistics and delivery services.

Meituan: Meituan is a Chinese internet platform company whose shares have declined since January. However, some analysts suggest that Chinese internet platform companies like Meituan may be less vulnerable to AI disruption compared to US software firms. This is attributed to their reliance on offline operations, such as logistics networks and delivery services.

JD Health: JD Health, a Hong Kong-listed company, has seen its shares decline since January. This decline is attributed to a broader market trend where investors are shifting away from technology stocks and into traditional sectors. Despite this, some analysts suggest that Chinese internet platform companies like JD Health might be less vulnerable to AI disruption compared to their U.S. software counterparts, primarily due to their reliance on offline operations.

AI generated, for reference only

What Happened When

Late January 2026：: The Hang Seng Tech Index began trending lower, marking the start of a notable shift out of technology stocks in Hong Kong.

Since January 2026：: Shares of Hong Kong-listed Alibaba, Meituan and JD Health have been declining.

March 2 to 6, 2026：: The Hang Seng Index fell 3.3% and the tech gauge dropped 3.7%, while energy and utilities rose 4.3% and 1%, respectively, reflecting sector rotation in Chinese markets.

AI generated, for reference only