Hong Kong stocks extended losses in the afternoon session, with the benchmark Hang Seng Index closing 250.36 points, or 1.00%, lower at 24,667.24. The decline came as the yield on 10-year US Treasuries climbed to levels not seen in nearly two decades, intensifying expectations that the Federal Reserve will raise interest rates this week. Aggregate turnover for the day reached HK$187.201 billion. The Hang Seng China Enterprises Index fell 0.96% to 8,204.91, while the Hang Seng Tech Index slipped 0.62% to 4,291.34.
According to a research note from Soochow Securities, while the data suggests the Fed could potentially hold rates steady, the market has already priced in a full rate hike. If the central bank opts for no action, markets are unlikely to accept it; if it raises by 25 basis points as expected, it would merely fulfill expectations. Either way, if long-term yields do not decline significantly, Hong Kong equities are likely to remain under pressure.
Where the blue chips landed
CATL (03750) led the losses among blue-chip stocks, closing down 6.01% at HK$516.0 on turnover of HK$3.009 billion. CLSA noted that investors are focused on negative news including potential demand destruction from higher energy storage system (ESS) prices and the possibility that clients such as Xiaomi and Li Auto could switch to alternative battery suppliers. While there are no positive catalysts in the near term, the brokerage believes the share price has already priced in these bearish expectations.
Other notable movers among blue chips included NetEase (09999), which rose 2.75% to HK$187.1; Techtronic Industries (00669), up 2.53% at HK$129.6; and Tencent (00700), which gained 1.90% to HK$438.8. On the downside, Bank of China (Hong Kong) (02388) dropped 4.57% to HK$51.2.
Which sectors drove the action
Large-cap internet and technology names defied the broader market weakness, with Tencent advancing nearly 2% and Alibaba adding more than 1%. Memory semiconductor stocks, which were hit hard the previous session on concerns over slowing AI demand, staged a rebound, with Montage Technology and GigaDevice among the standout performers. PCB concept stocks also traded firmly higher, while a number of AI-related names gained ground, with Haiqing Zhiyuan surging a cumulative 45% over two sessions.
On the flip side, non-ferrous metals came under pressure as Treasury yields pushed higher and rate hike expectations weighed on the complex. Hong Kong banking stocks, pharmaceutical companies, and mainland property developers also softened.
PCB concept stocks were among the top gainers. Kingboard Laminates Holdings (01888) closed up 3.12% at HK$47.6, Kingboard Holdings (00148) advanced 2.41% to HK$55.25, Guanghe Technology (01989) rose 1.94% to HK$121.0, and Shenghong Technology (02476) gained 1.93% to HK$195.2. The copper foil supply chain has seen a wave of price hikes recently. Kingboard Laminates, a leading CCL producer, issued its seventh price increase notice of the year in late August, raising prices for all thicknesses of FR-4 copper clad laminates by 10% and adjusting prepreg prices by specification. FR-4 prices have now climbed more than 100% year-to-date. Japan's Panasonic also raised prices by up to 30% for standard multi-layer CCL and prepreg effective September 1, with low-loss high-speed materials also adjusted upward. According to a research report from Zheshang Securities, as upstream PCB material prices continue to rise, the price increases are beginning to transmit to certain PCB product categories, with the effects expected to show up progressively from the third quarter of 2026.
Memory chip stocks bounced back, with Montage Technology (06809) jumping 5.43% to HK$256.2 and GigaDevice (03986) advancing 4.00% to HK$436.8. Industry sources indicate that Apple has accepted Samsung Electronics' first-quarter 2027 memory chip quotes: DRAM at nearly US$2.0 per Gb and NAND flash near US$0.33 per Gb, representing a 30%-40% increase over third-quarter prices this year. On the policy front, the Ministry of Industry and Information Technology and the National Development and Reform Commission issued the 15th Five-Year Plan for the Development of the Electronic Information Manufacturing Industry, calling for accelerated development of advanced storage capacity and research into new memory products such as high-bandwidth flash and high-bandwidth memory.
Gold and other non-ferrous metal stocks fell sharply. Chifeng Jilong Gold Mining (06693) dropped 5.33% to HK$36.58, Shandong Gold Mining (01787) declined 4.65% to HK$23.36, and Zijin Mining Group (02899) slipped 3.81% to HK$33.3. Rising oil prices from Middle East geopolitical conflicts and the 10-year US Treasury yield breaking above 5% pushed the US dollar index sharply higher to around 99.6, while spot gold fell below the US$4,300 level. US August PPI and CPI data released last week showed inflation pressures remain elevated, with core CPI exceeding expectations. Market pricing now implies an approximately 87% probability of a 25-basis-point rate hike by the Fed this week. BOCO International noted that for non-ferrous metals, the restart of rate hikes and the energy shock form a dual drag. Precious metals may consolidate at high levels or even see periodic pullbacks before the September FOMC meeting. Aluminum and other energy-intensive metals are supported by higher cost bases, while copper faces a tug-of-war between rate hikes, tariffs, and hard supply constraints from mines, limiting downside room.
Notable individual movers
True Health Medical-B (02697) surged 30.34% to HK$340.2. The company has entered into a sales contract with an independent third party to sell puncture surgery navigation and positioning systems, with total contract value approaching RMB 100 million. Delivery of the relevant products is scheduled to commence shortly. The board believes the contract signing and subsequent deliveries will help expand the company's installed base and drive equipment revenue growth.
Haiqing Zhiyuan (01392) continued its upward trajectory, gaining 11.83% to HK$27.6. The Shenzhen Municipal Bureau of Industry and Information Technology recently announced the proposed list of model service institutions for 2026. Haiqing Zhiyuan was selected based on its self-developed "Zhiyuan Origin Large Model." With this inclusion, eligible local enterprises in Shenzhen can enjoy policy subsidies when purchasing its multispectral AI services, which is expected to lower customer procurement costs, expand industrial scenario orders, and accelerate commercial adoption of the vertical large model.
Dajin Heavy Industry (01081) rose sharply, closing up 10.90% at HK$33.78. Norwegian consultancy Rystad Energy's latest analysis indicates that European offshore wind expansion is facing structural supply constraints. Since 2020, offshore wind turbine selling prices (on a per-MW basis) have risen 40%-45%, significantly outpacing the 20%-25% increase in manufacturing costs over the same period.
Jiaxin International Resources (03858) performed well, rising 4.05% to HK$55.2. On Monday, US tungsten metal producer The Elmet Group Co. announced that the US Department of War has committed US$450 million to accelerate ELMT's manufacturing capabilities. According to CCTV Finance, international market prices for intermediate tungsten products have surged approximately nine-fold over the past two years. Recently, the US, UK, Vietnam, Zimbabwe and other countries have adjusted tungsten-related policies, intensifying the global scramble for tungsten resources.
GAC Group (02238) resumed trading with gains, closing 2.58% higher at HK$2.385. On September 14, the company signed a letter of intent with China FAW Co., Ltd. to plan the purchase of a portion of equity in a joint venture vehicle company held by FAW through the issuance of shares, along with raising supporting funds. Based on preliminary calculations, FAW would become the company's second-largest shareholder with strategic influence following the completion of the transaction.
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