Hong Kong's three major stock indexes all declined on Thursday. The Hang Seng Index opened lower and remained in weak consolidation throughout the morning session. A broad decline in tech stocks weighed on the market, with the Hang Seng Tech Index at one point falling over 2%. At the close, the Hang Seng Index was down 0.98% or 247.58 points, finishing at 24,963.23 points, with total turnover for the day reaching HKD 209.877 billion. The Hang Seng China Enterprises Index also fell 0.98% to 8,271.06 points, while the Hang Seng Tech Index dropped 1.47% to 4,629.51 points. For the week, the Hang Seng Index accumulated a gain of 1.63%, the H-shares Index rose 1.65%, and the Tech Index added 0.14%.
GF Securities believes the key for the second half of the year is whether liquidity pressure can ease marginally. However, a trend reversal still requires a co-movement of improved overseas liquidity and a stabilization of domestic fundamentals. Hong Kong's stock market is in a period of transitioning between old and new growth drivers. The profit recovery for old drivers lacks momentum, while new drivers have not yet taken over. Liquidity is the core factor driving market trends. Currently, Hong Kong market liquidity is facing simultaneous withdrawal pressure from industrial capital, foreign capital, and southbound capital.
Among blue-chip stocks, BOC Hong Kong (02388) led the gainers. It closed up 5.98% at HKD 51.25, with turnover of HKD 1.943 billion, contributing 16.42 points to the Hang Seng Index. JPMorgan upgraded its investment rating on BOC Hong Kong from "Neutral" to "Overweight," raising its target price from HKD 43.3 to HKD 53.3. The bank also raised its earnings forecasts for BOC Hong Kong for the fiscal years 2026 and 2027 by 8% and 9%, respectively, predicting the stock will continue to outperform the market over the next 6 to 12 months, supported by reasonable valuations and strong total shareholder returns.
Other blue-chip movers included GEELY AUTO (00175), which rose 2.92% to HKD 19.06, contributing 5.36 points to the index. BeiGene (06160) gained 2.79% to HKD 199.2, contributing 10.04 points. On the downside, Xinyi Glass (00868) fell 5.14% to HKD 8.85, dragging the index down by 1.69 points, while CMOC (03993) dropped 4.49% to HKD 16.82, shaving 4.52 points off the index.
Hot Sectors
On the sector front, large tech stocks mostly fell, with Alibaba dropping over 4% and Tencent losing more than 2%. With rising expectations of interest rate hikes widening net interest margins for Hong Kong banks, local banking stocks bucked the downtrend. BOC Hong Kong rose nearly 6%, hitting a new high. Some beverage stocks surged in the afternoon, with Andre Juice at one point gaining nearly 28%. Following a major breakthrough in China's brain-computer interface (BCI) technology, Brain Arouser-B (06681) initially rose 16% in early trade before paring gains to close lower. Conversely, the PCB concept and non-ferrous metals sectors were among the worst performers. Real estate, aviation, and heavy machinery stocks also faced downward pressure.
Local Hong Kong Banks Defy Market Weakness
At the close, BANK OF EAST ASIA (00023) rose 6.03% to HKD 14.94. BOC Hong Kong (02388) advanced 5.98% to HKD 51.25. Dah Sing Banking Group (02356) increased 5.56% to HKD 13.68. Driven by rising oil prices, U.S. Treasury yields climbed to their highest levels this year, leading markets to anticipate a potential rate hike by the Federal Reserve as early as next week. Traders currently estimate about a 31% probability of a 25 basis point rate hike at the Fed's upcoming meeting, with a 69% chance of rates remaining unchanged. A rising rate environment is expected to widen net interest margins, which could benefit the profitability of Hong Kong's banking sector. Huatai Securities previously noted that foreign capital has been increasing its allocation to the Hong Kong financial sector overall since the start of the year, recommending investors seize the opportunity for a revaluation of Hong Kong banks. The next phase requires attention to opportunities for performance improvement driven by the recovery of Hong Kong's economic fundamentals and stabilization of interest rate spreads.
BCI Concept Stocks Rally, Then Fade
By the close, NANJING PANDA ELECTRONICS (00553) fell 2.99% to HKD 3.24. MicroPort NeuroTech (02172) declined 2.24% to HKD 8.73. Brain Arouser-B (06681) ended 1.2% lower at HKD 1.65. A Chinese research team released a new type of brain electrical signal acquisition device, achieving the world's first cross-regional synchronous acquisition of brain signals from over a thousand people. This marks a key step forward in neural large model training and general BCI technology development. Notably, a series of supportive policies for BCI have been intensively released recently. The State Council's "National Health '15th Five-Year Plan' explicitly calls for strengthening technological breakthroughs in areas like BCI, while 14 government departments, including the Ministry of Civil Affairs, released a three-year plan for rehabilitation aids. Everbright Securities believes that with the intensive release of industry policies and accelerated technological iteration, this year could be a critical year for BCI to enter a phase of technological realization and commercial implementation.
Non-Ferrous Metals Lead Losses
At the close, CMOC (03993) fell 4.49% to HKD 16.82. CHALCO (02600) dropped 3.82% to HKD 8.30. Zijin Mining (02899) declined 3.4% to HKD 32.38. The convergence of heightened U.S.-Iran tensions, oil prices returning above $100, and renewed inflation expectations caused U.S. Treasury yields to surge across the board to multi-year highs, suppressing risk appetite in non-ferrous metals. On July 23, the yield on the 10-year U.S. Treasury note rose 4 basis points to 4.71%, its highest level since January 2025. On July 24, U.S. Treasury yields continued their collective surge, with the 10-year yield climbing to a new phase high of 4.7135% and the 30-year yield reaching 5.1753%. Sinolink Securities believes the recent rebound in gold and silver is a result of funds rotating out of the collapsing tech momentum theme, rather than a confirmation of a new trending rally.
Airline Stocks Under Pressure
By the close, China Eastern Airlines (00670) fell 3.46% to HKD 3.07. China Southern Airlines (01055) dropped 2.61% to HKD 3.36. Air China (00753) declined 2.16% to HKD 4.07. Affected by the escalating U.S.-Iran situation, Brent crude oil futures touched $100 per barrel on Thursday for the first time since late May. The current U.S.-Iran situation has escalated again, leading to triple supply constraints via the Strait of Hormuz, the Bab el-Mandeb Strait, and the Black Sea. U.S. President Donald Trump threatened to increase the intensity of strikes, stating he was considering launching a "massive attack." Due to rising jet fuel prices driven by the Middle East conflict, China's three major state-owned airlines expect their first-half losses to have increased significantly year-on-year. Based on the range of their performance forecasts, the three companies are expected to report a combined net loss attributable to shareholders of between RMB 7.373 billion and RMB 8.973 billion for the first half of this year.
Notable Stock Movements
XINXIN MINING (03833) issued a profit alert. It closed up 7.95% at HKD 1.90. The company expects first-half 2026 revenue of approximately RMB 1.266 billion, up about 13.2% year-on-year, and net profit of approximately RMB 257 million, up about 259.4% year-on-year. The significant profit growth is mainly attributed to higher prices of its core products, electrolytic nickel and cathode copper, leading to a substantial improvement in profitability.
MONTAGE TECH (06809) performed strongly, closing up 6.67% at HKD 332.6. The company announced a plan to repurchase A-shares via centralized bidding, with a repurchase amount of no less than RMB 300 million and no more than RMB 600 million, at a repurchase price not exceeding RMB 332.90 per share. The repurchase period is within three months from the date of board approval, using the company's own funds, for the purpose of maintaining company value and shareholder equity.
Z.AI (02513) bucked the trend, closing up 5.64% at HKD 1,237. The company's GLM 5.2 model recently intervened to resolve a runaway AI incident. The company stated via its official Weibo account that this incident further confirmed the value of open-sourcing GLM 5.2. The GLM 5.2 model, released by Z.AI in mid-June, has performance comparable to Anthropic's Claude Opus 4.8 and OpenAI's GPT-5.5.
China Modern Dairy (01117) continued its upward trend, closing up 3.25% at HKD 1.27. The company issued a profit alert, expecting a pre-tax profit of no less than RMB 43 million for the first half of 2026, turning around from a loss in the same period last year. The profit growth is mainly due to a decrease in the fair value loss on dairy cows compared to the same period last year, resulting from a lower number of culled cows and higher culling prices, combined with stable gross profit margins for raw milk sales and an increase in gross profit.
GEELY AUTO (00175) was active throughout the session, closing up 2.92% at HKD 19.06. Geely plans to spend EUR 221 million to acquire a 34% stake in Ford's Spanish factory, advancing its localized production layout in Europe. This acquisition will help the company directly access a mature European production platform, allowing it to produce some Geely-branded vehicles locally for the European market, supporting the group's localization strategy in Europe.
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