The Hong Kong stock market opened lower and continued to decline today, with all three major indices retreating. "Small nonfarm payrolls" missed market expectations, geopolitical tensions eased, weakening the logic for rate hikes, and gold ETFs rallied again. Meanwhile, the dividend style made a comeback with stronger coal price expectations, leading to standout performances from coal ETFs. By the close, the Hang Seng Index fell 1.49% to 25,530.28 points, with a full-day turnover of HKD 255.227 billion; the Hang Seng Tech Index dropped 2.28% to 4,820.78 points.
In the Hong Kong ETF space, among the top products by scale, the Tracker Fund of Hong Kong (02800) closed down 1.52% at HKD 26; the Hang Seng China Enterprises Index ETF (02828) fell 1.13% to HKD 87.54; and the CSOP Hang Seng Tech Index 2x Leveraged Daily (07226) declined 4.73% to HKD 3.586.
Gold ETFs Rally Again
The "small nonfarm payrolls" missed market expectations, and geopolitical tensions cooled, reducing the rationale for interest rate hikes, prompting gold ETFs to rise again. By the close, the CSOP Gold Futures 2x Leveraged Daily (07299) gained 4.36% to HKD 22.96; the E Fund Gold ETF (02824) increased 2.96% to HKD 10.42; and the Value Gold ETF (03081) rose 2.39% to HKD 20.16. The U.S. ADP "small nonfarm payrolls" for July added only 44,000 jobs, below the market expectation of 75,000, indicating that a cooling labor market is starting to ease the pressure on the Federal Reserve to raise rates. Additionally, expectations of a reopening of the Strait of Hormuz have tempered energy inflation concerns. These factors combined to drive a strong rebound in international gold prices, with spot gold returning above the $4,200/ounce mark and briefly breaking through $4,300/ounce. Huachuang Securities believes that the short-term weakening of inflation and employment data has lowered rate hike expectations, creating a window for gold to recover. They recommend monitoring the U.S. nonfarm payrolls data on the 7th and the CPI data on the 12th of this month for further confirmation of employment and inflation trends.
Coal Dividend Style Makes a Comeback
The dividend style returned with stronger coal price expectations, leading to impressive performances from coal ETFs. By the close, the 煤炭 ETF (515220.SH) surged 5.88% to 1.243 yuan; the Energy ETF (159930.SZ) rose 2.69% to 1.68 yuan; and the Dividend State-owned Enterprise ETF (510720.SH) gained 2.57% to 1.038 yuan. On August 5, the CCI index for thermal coal was raised across the board, with the 5,500 kcal grade reported at 839 yuan/ton, up 5 yuan/ton. As the country enters the second half of the hottest summer period, high temperatures are expected to gradually shift northward, with rising temperatures in the Jiangsu-Zhejiang-Shanghai region keeping power plant coal consumption at high levels. Demand during the peak summer season continues to be released, while supply-side high-pressure safety inspections persist, limiting output. Coal inventories at Bohai Rim ports and coastal power plants have both declined significantly, fueling expectations of stronger coal prices. Cinda Securities notes that the coal sector remains characterized by high earnings, high cash flow, and high dividends, with the industry retaining high prosperity, long cycles, and high barriers. The coal sector has a safety margin from high dividends for downside support, while upside potential is catalyzed by expectations of rising coal prices. They continue to be fully bullish on the coal sector.
Institutional Perspectives
According to CSC Financial, after a period of concentrated downward earnings forecast revisions in the internet, automotive, and consumer tech sectors in the first half of the year, the market has already priced in much of the negative news. Recently, the pace of downward earnings revisions in Hong Kong stocks has slowed significantly, and signs of marginal stabilization are enough to drive a rapid recovery in undervalued assets. Looking ahead, for Hong Kong stocks to transition from a "bounce-back rebound" to a "long-term bull reversal," two major hurdles must be overcome: achieving a substantial, resilient recovery in corporate earnings, and significantly improving the US dollar liquidity and the stock's trading structure. CSC Financial suggests that the sector allocation strategy for August should adopt a "barbell structure" of "defensive positions + supply-constrained, price-rising sectors + tech core recovery." In July, the market experienced a sharp rotation from high-growth stocks to low-valuation value stocks, but the adjustment in the tech sector was more due to position unwinding and deleveraging, not a complete reversal of the AI industry trend. In terms of allocation, priority should be given to the shipbuilding and non-ferrous metals sectors, where fundamentals, supply-demand dynamics, and prices are aligning. AI hardware can be upgraded from underweight to neutral, focusing on higher-certainty areas like optical modules and AI servers, while waiting for mid-year report orders, cash flow, and stock price stabilization before adding positions gradually. Sectors that were strong in July, such as 煤炭, petrochemicals, and food and beverages, should not be chased at higher levels; instead, select upstream resources and high-quality consumer leaders within these sectors.
ETF News
The Aviation and Aerospace ETF (158009.SZ) debuted flat on its first day of trading, closing at 1.017 yuan with a turnover of 126 million yuan. This ETF tracks the CSI National Defense and Aerospace Industry Index, primarily covering stocks related to the aviation and aerospace supply chain.
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