Hong Kong's main board saw moderate gains today, with the Hang Seng Tech Index dipping into negative territory by the close. With the ASCO conference approaching and domestic Biologics License Applications (BD) accelerating overseas expansion, Innovation Drug ETFs experienced a volatile rebound; meanwhile, the semiconductor industry chain retreated, leading to a collective sharp decline in STAR 50 ETFs. At market close, the Hang Seng Index rose 0.7% to 25,182.39 points, with a total daily turnover of HK$462.07 billion. The Hang Seng Tech Index fell 0.09% to 4,884.23 points. Among Hong Kong stock-related ETFs, the performance of the top turnover products diverged: Tracker Fund (02800) closed up 0.55% at HK$25.40; CSOP 2x Long SK Hynix ETF (07709) closed up 3.07% at HK$137.65; Hang Seng China Enterprises Index (02828) closed up 0.68% at HK$86.38.
Sector Performance 1. The Innovation Drug sector rebounded amid volatility, leading the Hong Kong market, with related ETFs all rising. By the close, the ICBC Innovation Drug ETF via Stock Connect (159217) rose 5.22% to RMB 1.129; the ChinaAMC Innovation Drug ETF via Stock Connect (159570) rose 4.70% to RMB 1.381; the Huatai-PineBridge Hang Seng Innovation Drug ETF (520500) rose 4.66% to RMB 1.370. The imminent opening of the ASCO conference, coupled with the multi-billion dollar BD cooperation agreement between Innovent Biologics (01801) and Pfizer, significantly boosted sector sentiment. Orient Securities noted that the recent release of 2026 ASCO abstracts shows domestic innovative drugs achieving comprehensive breakthroughs in multiple cancer types including lung and breast cancer, significantly enhancing their international influence. In the lung cancer field, domestic second-generation immuno-oncology and ADC data are impressive, with multiple clinical results challenging first-line standard treatments. In other solid tumor areas, next-generation CDK inhibitors, ADCs targeting HER2, TROP2/HER3, EGFR/HER3, and small molecules like KRAS inhibitors are gradually validating their clinical value, with multi-mechanism, multi-indication progress advancing simultaneously. Overall, the research and development realization of domestic innovative pharmaceutical companies continues to improve, with high-quality varieties expected to reshape treatment paradigms.
2. STAR 50 ETFs suffered a collective sharp decline as the semiconductor industry chain faced selling pressure. At the close, the SSE STAR 50 Index fell over 5%. Bosera SSE STAR 50 ETF Trust (02832) fell 5.29% to HK$12.71; PP SSE STAR 50 ETF (03151) fell 4.99% to HK$12.37; China Southern SSE STAR 50 ETF (03109) fell 4.48% to HK$17.06. The entire semiconductor stock sector weakened following news of the National Integrated Circuit Industry Investment Fund (Big Fund) reducing its holdings in several semiconductor stocks including SMIC (00981) and National Silicon Industry Group. Northeast Securities stated that as indices, especially high-growth, high-valuation AI tech leaders, continue to rise, this sustainability is challenged by continuous redemptions of broad-based ETFs, a lack of incremental funds, and dominance by margin trading and quantitative strategies. The divergence in market structure is intensifying, and it is expected that the market will require repeated style rotations to balance the overly divergent structure. Liu Yu of Industrial Securities believes that TMT sector crowding has reached a historical high of 48%, and the implied volatility of STAR 50 ETF options is at a high level since 2026, suggesting potential volatility in the computing hardware sector.
Institutional Views Everbright Securities believes the market has already reflected negative factors quite fully. The return of overseas passive funds and the long-term inflow of southbound capital provide a solid value bottom for the Hong Kong market. However, active foreign capital representing global long-term capital has not returned on a large scale, leaving the market lacking the most crucial driver for a sustained trend. Everbright Securities points out that the Hong Kong market does not yet have the foundation for a broad-based bull market but has entered a structural phase centered on "defense as the foundation, growth for opportunities." Specific allocation directions include: 1) Trend allocation: The entire AI computing power industry chain (semiconductors, cloud, servers, AI power, etc.); 2) Contrarian positioning: Focus on sectors where active foreign capital has significantly increased holdings, such as tech internet stocks with lower valuations and improving expectations.
ETF Developments On May 29, four domestic ETFs and one Hong Kong Stock Connect ETF debuted for the first time: 1. N SSE STAR 200 ETF Eastmoney (589330) debuted, closing down 4.83% at RMB 0.965, with a turnover of RMB 26.921 million. The fund tracks the SSE STAR 200 Index, focusing on the mid-to-large-cap growth segment of the STAR Market. 2. N Hang Seng Index HK Connect ETF Bosera (526070) debuted, closing down 0.30% at RMB 0.981, with a turnover of RMB 58.156 million. The fund tracks the Hang Seng Stock Connect Hong Kong Index, covering blue-chip stocks eligible for the Stock Connect program. 3. N Construction Machinery ETF Huatai-PineBridge (561030) debuted, closing up 0.30% at RMB 0.995, with a turnover of RMB 68.877 million. The fund tracks the CSI Construction Machinery Theme Index, investing in leading construction machinery manufacturers and core component suppliers. 4. N STAR & ChiNext AI ETF ChinaAMC (588510) debuted, closing down 4.53% at RMB 0.969, with a turnover of RMB 91.353 million. The fund tracks the CSI STAR & ChiNext Artificial Intelligence Index, covering core AI industry chain targets from the STAR Market and ChiNext Board. 5. ChinaAMC Digital Gold ETF (03418) debuted, closing up 2.67% at HK$36.50, with a turnover of HK$47.5033 million. Information shows that as Hong Kong's first fully tokenized gold fund, this innovative product combines one of the world's oldest stores of value with transformative blockchain technology, leading the Real World Asset (RWA) tokenization revolution in Asia. The ETF employs a full physical replication strategy, aiming to closely track the London Bullion Market Association Gold Price AM (LBMA Gold Price AM).
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