Hong Kong's three major stock indices showed mixed performance on August 19. By the midday close, the Hang Seng Index rose 0.24% to 25,533.38 points, while the Hang Seng Tech Index fell 0.82% and the Hang Seng China Enterprises Index gained 0.62%.
Tech and internet stocks were mixed, with Baidu plunging over 11% while Xiaomi advanced more than 6%. Oil stocks led gains, with PetroChina rising over 2%. Mainland property stocks were active, with Sino-Ocean Group climbing over 4%. Chip stocks slumped, with Hua Hong Semiconductor dropping more than 12%.
Oil stocks led the gains, with PetroChina rising over 2%. The dimming prospects for a ceasefire agreement continued to support crude oil prices. In early trading on August 19, Brent crude futures expanded gains to 1%, reaching $91.95 per barrel. Market participants widely believe that heightened tensions in the Middle East have increased supply-side uncertainty, serving as the primary driver pushing oil prices upward. Beyond geopolitical factors, expectations of tightening global crude supply are also gaining traction, further strengthening the upward momentum in oil prices. During an oil price upcycle, oil stocks typically attract capital inflows as direct beneficiaries.
Mainland property stocks were active, with Sino-Ocean Group rising over 4%. Data released by the National Bureau of Statistics on the real estate market for the first seven months of 2026 showed that national new commercial housing sales fell 13.1% year-on-year from January to July, with the decline narrowing by 0.5 percentage points compared to the January-June period, indicating signs of marginal improvement on the demand side. Policy focus remains centered on accelerating the implementation of existing measures, including increasing support for housing consumption and smoothing the chain of first- and second-hand home transactions. Looking ahead, after entering the traditional "golden September and silver October" season, the effects of policies combined with the release of replacement demand are expected to drive marginal improvements in transaction volumes in core cities, though the divergence between cities and projects is likely to persist in the near term.
Chip stocks tumbled, with Hua Hong Semiconductor falling over 12%. BofA Securities released a research report noting that, given the depreciation cost pressures faced by Hua Hong Semiconductor, the company's profit margins and profitability are not expected to improve significantly next year. The firm extended its valuation base for Hua Hong to 2027, raising the target price from HK$63 to HK$69, while reiterating an "underperform" rating due to what it considers excessive valuations.
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