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

Ask AI · Xiaomi Group’s short selling surges nearly 90%, why are market disagreements so extreme?

Cailian Press, April 2 (Editor Hu Jiarong) Recently, the Hong Kong stock market has continued to show high volatility, with fluctuating and unpredictable trends. For example, yesterday’s Hong Kong stocks’ three major indices all rebounded, but the next day they fell again, with the tech index leading the decline, reflecting investors’ cautious sentiment toward the tech sector persists. The Hang Seng Tech Index, as a market barometer, influences the nerves of the entire Hong Kong stock market.

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

Tencent Holdings’ short selling data, after a rapid decline in late March, has recently shown an upward trend again. Data shows that the number of Tencent shares shorted increased from 2.9645 million shares at the end of March to 3.6081 million shares on April 1, an increase of about 21.7%. Notably, during the same period, the short selling amount decreased from HKD 3.04B to HKD 1.8B, a drop of 40.9%. This divergence indicates that while the number of short positions is increasing, the size of individual trades is shrinking, and market disagreement is intensifying.

Note: Tencent Holdings’ short selling situation

Alibaba’s short selling data also shows an upward trend, but at a more moderate pace. The number of shares shorted rose from 11.6424 million at the end of March to 11.7745 million on April 1, a slight increase of 1.1%. Meanwhile, the short selling amount decreased from HKD 1.77B to HKD 1.45B, an 18.1% decline. This data indicates that although the short positions have slightly increased, the capital involved has decreased, and market bearish sentiment toward Alibaba has not significantly worsened.

Note: Alibaba’s short selling data

Xiaomi Group’s short selling data changed most dramatically, showing that market disagreement over this stock has reached an extreme. The number of shares shorted surged from 31.5692 million on March 27 to 59.4576 million on April 1, an increase of 88.3%. Notably, during the same period, the short selling amount jumped from HKD 1.04B to HKD 1.9 billion, an 83.4% increase. This data was further amplified on April 2, with Xiaomi Group’s short selling volume reaching HKD 2.25B, ranking second in the entire market, indicating concentrated shorting pressure on this stock.

Note: Xiaomi Group’s short selling data

Recent Hong Kong Stock Short Selling Data Panorama

From a broader time perspective, the activity of short selling in the Hong Kong market has shown a fluctuating upward trend since early 2026. In March, the market experienced a significant correction, with the Hang Seng Index falling by 7% cumulatively, and the Hang Seng Tech Index performing even worse, with a total decline of 9.50% for the month. Against this backdrop, short selling has become an important risk management tool for investors.

Historical data shows that from October 13, 2025, to January 8, 2026, the daily short selling amount in Hong Kong stocks once sharply declined from HKD 7.8B to HKD 4.33B, a drop of 44.6%. However, this trend has recently reversed. In mid-March, short selling scaled up again, with Tencent Holdings’ shorted shares once surging from 2.4538 million on March 17 to 8.3963 million on March 20, an increase of over 240%, reflecting a rapid rise in market panic sentiment.

Southbound Funds Contradictory Buying

Contrasting sharply with short selling data, southbound funds have recently shown a contrarian net inflow. According to relevant data, since February, southbound funds have accumulated a net inflow of HKD 90.58B, with a weekly net inflow of HKD 13.26B into Hong Kong tech ETFs, and some Hang Seng Tech ETF products’ shares increasing about sixfold over four months. This “buying more as prices fall” characteristic indicates institutional investors’ recognition of the long-term value of the tech sector, forming a clear contrast with short-term bearish bets.

(Cailian Press, Hu Jiarong)