Market Overview
Hong Kong stocks saw a moderate uptick today, with the Hang Seng Tech Index maintaining a solid performance. A shockwave from South Korea's proposed emergency reduction of leveraged product multipliers sent Korean stock ETFs into a tailspin, while the global de-leveraging of tech hardware spilled over, hammering China's semiconductor ETFs. At the close, the Hang Seng Index rose 0.48% to 26,009.4 points, with total turnover of HKD 255.179 billion. The Hang Seng Tech Index gained 0.96% to 4,875.61 points.
Among top Hong Kong-listed ETFs by size, Tracker Fund of Hong Kong (02800) edged up 0.23% to HKD 26.46; CSOP Hang Seng Tech Index ETF (03033) rose 1.06% to HKD 4.78; and CSOP KODEX Hynix 2x Leveraged (07709) plummeted 16.65% to HKD 35.44.
Korean ETFs in Turmoil
Impacted by South Korea's emergency plan to lower leverage product multiples, Korean stock ETFs saw massive swings. By the close, CSOP KODEX Hynix 2x Leveraged (07709) lost 16.65% to HKD 35.44; CSOP KODEX Samsung Electronics 2x Leveraged (07747) fell 13.99% to HKD 66.62; and TR Korea (02848) dropped 4.2% to HKD 1,652. The Korean market opened sharply lower today, with the KOSPI index plunging over 5% at one point, while Samsung Electronics and SK Hynix each fell more than 7%. The Financial Services Commission of South Korea tightened restrictions on retail investors' access to single-stock leveraged ETFs starting July 31, a move that suppressed overall volatility in the KOSPI market. Foreign investors emerged as the largest net sellers of KOSPI index components, and local funds also joined the selling. Huatai Securities suggests that Hong Kong's current rebound is largely driven by hedging unwinds and cross-market rebalancing of leveraged ETFs and AI hardware positions in neighboring markets like South Korea, along with rotation by pure long funds, making it more capital-flow driven. Huatai advised that amid global de-leveraging and event-driven shocks, investors should watch AI hardware sectors under capital pressure but with strong fundamentals, such as wafer foundries, and wait for oversold bounce opportunities with small positions.
Semiconductor ETFs Take a Hit
The global tech hardware de-leveraging wave cascaded into China, causing a sharp selloff in STAR Market semiconductor ETFs. By the close, Huatai-PineBridge STAR Semiconductor Equipment ETF (588710.SH) crashed 9.93% to CNY 2.567; ChinaAMC STAR Semiconductor ETF (588170.SH) fell 9.89% to CNY 0.829; and Guotai Semiconductor Equipment ETF (159516.SZ) dropped 9.7% to CNY 0.605. AVIC Securities noted that since the "924" rally, the market has experienced multiple V-shaped reversals, but those were often driven by external shocks like tariff disputes or geopolitical tensions, without fundamentally breaking the core trading logic. This time, however, the global de-leveraging has pushed major tech hardware indices into a technical bear market. While fundamentals remain strong, cracks have emerged—such as Alphabet's free cash flow turning negative, Microsoft cutting capital expenditure, and Anthropic's ARR growth slowing—signaling growing divergence in the tech bull cycle.
Outlook from Analysts
AVIC Securities believes that the global de-leveraging of tech stocks may be nearing its end, with domestic market-stabilizing funds expected to smooth out irrational volatility triggered by overseas factors. In the near term, A-share market volatility is likely to gradually decline, and the bottom range may have been confirmed. Structurally, a style rebalancing is set to continue, with a steady recovery for tech stocks. Investors can also explore opportunities in sectors like basic chemicals, non-ferrous metals, and utilities as institutional positions rebuild. In the second half of the year, the shift between old and new growth drivers is expected to continue, with domestic monetary easing policies on the horizon. Bond and dividend-yielding sectors may offer high-probability absolute return opportunities.
ETF New Listings
Huatai-PineBridge CSI Dividend Low Vol 50 ETF (561450.SH) made its debut today, closing down 0.3% at CNY 1.001, with turnover of CNY 128 million. The fund tracks the S&P China A-Share Large Cap Dividend Low Volatility 50 Index, focusing on A-share large caps with high dividends and low volatility.
Xinyuan CSI Animal Husbandry ETF (561400.SH) also listed today, dropping 0.2% to CNY 1.001, with turnover of CNY 111 million. It tracks the CSI Animal Husbandry Industry Index, investing in listed companies in the livestock chain, including hog farming, feed, and animal health.
Xingye CSI Value 100 ETF (159079.SZ) debuted, closing down 0.59% at CNY 1.016, with turnover of CNY 111 million. The fund tracks the Guozheng Value 100 Index, focusing on A-share companies with value characteristics.
Wanjia CSI Chemical Industry ETF (159087.SZ) launched, ending down 0.8% at CNY 0.998, with turnover of CNY 57.9478 million. It tracks the CSI Sub-Industry Chemical Industry Theme Index, investing in A-share companies within the specialty chemicals segment.
Comments