The Hong Kong market experienced a choppy session today, with the major indices opening lower but recovering to close in positive territory. A wave of positive earnings forecasts from leading companies served as a key catalyst, driving a broad-based rally in the metals and mining sector. Meanwhile, energy stocks surged once again, fueled by geopolitical tensions.
By the close, the Hang Seng Index had gained 0.52% to finish at 24,340.73, with a total turnover of HK$312.916 billion. The Hang Seng Tech Index edged up 0.06% to 4,679.46 points. Among the largest Hong Kong-listed ETFs by size, the Tracker Fund of Hong Kong (02800) rose 0.65% to HK$24.84, while the CSOP Hang Seng TECH Index ETF (03033) added 0.22% to HK$4.60. The CSOP 2x Long SAMSUNG ETF (07709) saw a significant gain of 8.85%, closing at HK$65.20.
Sector Performance Overview
Metals Sector Rally
A series of upbeat earnings previews from industry leaders acted as the primary catalyst, propelling the entire non-ferrous metals sector higher. Related ETFs posted strong gains. At the close, the Wanjia Industrial Metals ETF (560860.SH) surged 6.37% to CNY 1.553. The Tianhong Nonferrous Metals ETF (159157.SZ) advanced 6.17% to CNY 0.809, and the China Southern Nonferrous Metals ETF (512400.SH) climbed 5.66% to CNY 1.774.
The positive sentiment followed recent earnings guidance from several major metal producers for the first half of 2026. Tongling Nonferrous Metals Group forecast a net profit increase of 84% to 119% year-on-year, while Jiangxi Copper, Yunnan Aluminium, and other copper and aluminum miners also projected significant year-on-year profit growth for the period.
Analysis from Huatai Securities suggests the recent deep correction in leading A-share metal stocks was primarily due to valuation compression rather than damage to their underlying earnings per share (EPS). The sector's commodity fundamentals remain robust, yet valuations are at historically low levels. Compared to their internationally-listed peers, A-share metal leaders may have limited downside but offer considerable upside potential.
Huatai Securities further notes that this round of oversold conditions in the metals sector differs fundamentally from past events. During the 2008 subprime crisis and the 2015 A-share market turbulence, the fundamental backdrop for non-ferrous metals was a downturn cycle with both supply and demand under pressure. In contrast, the supply-demand dynamics for copper and aluminum are expected to shift towards and maintain a tight balance from 2026 to 2027.
For copper, the global mine capital expenditure cycle is lengthy, and supply disruptions are frequent. Regarding aluminum, domestic electrolytic aluminum inventories in China continue to decline, with global supply potentially at its tightest in the second and third quarters of 2026. On the demand side, industrialization in emerging markets and the global energy transition—driven by power grids, solar photovoltaics, and electric vehicles—provide medium- to long-term support for incremental demand for both copper and aluminum.
Energy Sector Surge
Geopolitical developments reignited the energy theme, leading to another strong performance for related ETFs. The Wells Fargo S&P Oil & Gas Exploration & Production ETF (513350.SH) jumped 6.94% to CNY 1.263, and the Samsung Futures Crude Oil ETF (03175) rose 6.81% to HK$9.80.
Market reports indicated that U.S. President Trump formally notified Congress of renewed hostilities with Iran, including plans to re-block the Strait of Hormuz. This news sent Brent crude futures soaring above $83 overnight, with gains extending to around $84 during Asian trading hours.
Adding to the tension, U.S. forces launched a fourth round of strikes in the early hours of July 13 local time, targeting Iran's largest petrochemical center. Damage to this facility could further threaten Iran's energy and chemical export capacity. Against the backdrop of escalating U.S.-Iran conflict, international oil prices have surged sharply, rekindling market expectations for Federal Reserve interest rate hikes.
Senior analyst Gao Jian from Qisheng Futures analyzed that the extent to which geopolitical risk supports prices ultimately depends on whether it materially impacts crude oil supply. The current U.S.-Iran conflict is notable for its scale and frequency, but its effect on the Strait of Hormuz is likely a short-term disruption. If the conflict triggers extreme retaliation from Iran and the U.S. moves to block Iran's maritime oil export channels again, the crude market could face a new round of supply shortages, potentially leading to sustained higher oil prices. However, if the friction remains short-lived, the oil price rebound may prove temporary.
Institutional Perspectives
According to analysis from CICC, as the fundamentals of the non-AI economic sectors in both China and the U.S. have not shown significant changes, the AI industry trend remains the likely medium- to long-term market主线, provided its trajectory stays clear. However, given that expectations, valuations, and positioning for U.S. and Chinese tech stocks are currently elevated, short-term volatility may increase. Beyond maintaining allocations to AI assets, the necessity of increasing exposure to liquidity-sensitive assets (such as gold and metals) may be rising.
CICC points out that China's domestic liquidity structure is shifting from traditional credit expansion to foreign exchange derivative creation, implying that Chinese assets are becoming more sensitive to U.S. dollar liquidity. The firm anticipates that the three potential variables for overseas liquidity in the second half of the year—geopolitics, inflation, and policy—are "false risks." Instead, the easing of geopolitical conflicts, declining inflation, and a shift towards policy easing by the Federal Reserve represent the "real opportunities" for global markets in the latter half of the year.
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