Hong Kong stocks opened higher and extended gains on Monday, with the Hang Seng Index briefly touching 23,259.13 before paring its advance. Oil, mainland property, and physical AI themes took turns leading the market, while AI hardware stocks came under renewed pressure.
At the close, the Hang Seng Index rose 0.51%, or 118.44 points, to 23,211.81, with total turnover of HK$175.758 billion. The Hang Seng China Enterprises Index gained 0.59% to 7,802.09, while the Hang Seng Tech Index slipped 0.36% to 3,857.53.
Galaxy Securities noted that during the window around the Federal Reserve's policy meeting, systemic reversal conditions remain absent, but structural opportunities after the selloff are concentrated in dividend and innovative drug names. The value of participating in the tech sector depends on how market sentiment recovers once the Fed's decision is finalized. The brokerage recommended focus on low-volatility dividend plays, innovative drugs and the CXO sector, and the technology sector.
Blue-chip performance
PetroChina (00857) led blue-chip gains, closing up 5.78% at HK$10.16 with turnover of HK$1.009 billion. Benefiting from higher oil prices, the company's first-half net profit rose 22% year on year, while second-quarter net profit increased 15% quarter on quarter. Huaan Securities previously noted that the company values shareholder returns and has continued to raise its dividend payout ratio and dividend yield.
Among other blue chips, Sinopec (00386) rose 4.04% to HK$4.64, Sinopharm (01099) gained 3.85% to HK$15.93, Zijin Mining (02899) fell 5.84% to HK$27.74, and Hua Hong Semiconductor (01347) dropped 4.74% to HK$64.25.
Hot sectors
Oil stocks served as the main driver of gains, with PetroChina up 5.78% and China Oilfield Services (02883) up 7.77%. Mainland property shares rose broadly, with Greentown China up 6.84%. Physical AI concept stocks heated up in the afternoon, with Camsense (06802) surging 15%. Domestic innovative drug results at the ESMO annual meeting were impressive, with some pharmaceutical stocks active.
On the other side, AI hardware stocks extended their weakness, with Kinwong Electronic (03228) down 11.84% and Yangtze Optical Fibre and Cable (06869) down 8.82%. Gold stocks retreated alongside bullion prices, while sporting goods and film stocks also came under pressure.
Oil and oilfield services stocks advanced. At the close, China Oilfield Services rose 7.77% to HK$7.98, PetroChina gained 5.78% to HK$10.16, and CNOOC (00883) added 3.55% to HK$23.94. The deadlock in the Middle East remains difficult to resolve in the short term, with clashes between Saudi Arabia and the Houthis intensifying, keeping geopolitical risk elevated and oil prices oscillating at high levels. According to reports, two U.S. officials said that if President Trump orders it, U.S. forces stationed in the Middle East are prepared to launch a new round of military action against Iran "within 96 hours of receiving the order." Huatai Securities previously noted that repeated geopolitical conflicts and other factors kept the average international crude oil price high in the third quarter, and oil and gas exploration companies are expected to post higher year-on-year profits.
Some physical AI concept stocks posted strong gains. At the close, Camsense rose 15.33% to HK$96.3, Dobot (02432) gained 8.92% to HK$18.56, and Hesai (02525) added 8.56% to HK$13.57. Over the past weekend, enthusiasm for physical AI surged. On Oct. 22, Unitree Technology held the 2026 World Physical AI Conference, suggesting that the ChatGPT moment for embodied intelligence could arrive as early as next year. Earlier, Jensen Huang's keynote at Nvidia's Berlin GTC event shifted focus from hardware sales to an AI factory system, with physical AI as a core topic. Meanwhile, general large models have begun participating in robot control, leading AI labs are entering the embodied model industry, and mass production ramp-ups by domestic robot makers and Optimus continue to accelerate.
AI hardware stocks continued to decline. At the close, Kinwong Electronic fell 11.84% to HK$56.6, Yangtze Optical Fibre and Cable dropped 8.82% to HK$102.3, Cambridge Technology (06166) declined 7.28% to HK$68.8, and Grand PCB (01989) lost 7.17% to HK$69.9. Recent market concerns over the return on investment and financing sustainability of AI companies have led to a significant correction in AI hardware stocks. As the current earnings season enters a period of performance verification, the match between valuations and results is facing reassessment. Notably, Elon Musk's latest prediction is that over the past few weeks, debt markets have almost completely cut off funding channels, and any company without large independent revenue outside AI data centers can hardly obtain financing.
Gold and other non-ferrous metals stocks came under broad pressure. At the close, Lingbao Gold (03330) fell 4.90% to HK$15.93, Chifeng Gold (06693) dropped 4.67% to HK$29.8, China Molybdenum (03993) declined 4.53% to HK$12.42, and China Gold International (02099) lost 3.06% to HK$177.6. On Oct. 26 in Asian trading, spot gold briefly fell below US$3,980 an ounce. Last week it dropped 4.12% for the week and touched a low of US$3,975, the weakest since early June. Shenyin Wanguo Futures believes the recent weakness in precious metals is mainly constrained by expectations of Fed tightening. With the U.S.-Iran situation fluctuating and oil prices surging again, inflation upside risks have further intensified, raising rate hike expectations and weighing on gold.
Notable movers
Livzon Pharmaceutical (01513) announced a large dividend. At the close, it rose 9.47% to HK$22.66. The company plans to distribute a cash dividend of RMB12.39 per 10 shares and issued a shareholder return plan for the next three years, specifying that the total annual cash dividend should in principle be no less than 90% of the distributable profit for the year, and the total annual cash dividend amount should in principle be no less than RMB2 billion (tax included).
H&H International Holdings (01112) reported a 24.5% increase in revenue for the first three quarters. At the close, it rose 8.67% to HK$22.3. The company announced that total revenue for the first nine months rose 24.5% year on year to RMB13.448 billion, mainly driven by strong growth in its adult and infant nutrition and care products segments.
Meitu (01357) reported a record high in paying subscribers. At the close, it rose 6.98% to HK$3.91. Meitu's paying subscribers increased by about 1.39 million net in the third quarter, a new high for the past four quarters, reaching 19.83 million as of September. Paying users of productivity applications rose 18.3% year on year to 2.39 million. ARR for AI productivity applications reached RMB655 million, up 40.1% year on year.
Cosco Shipping Energy Transportation (01138) benefited from high crude oil freight rates. At the close, it rose 6.63% to HK$17.7. A Goldman Sachs report showed that global average crude oil freight rates have risen from about US$3 per barrel a year ago to more than US$20 per barrel, with Middle East routes exceeding US$35 per barrel. Although freight rates have slightly retreated in recent days, the global average is still seven times that of a year ago. "As long as the Middle East conflict remains as it is, a sharp decline in freight rates is unlikely."
Zai Lab (09688) reported impressive DLL3 ADC data. At the close, it rose 5.57% to HK$18.77. Zai Lab announced the first data from the global Phase 1b clinical study of its DLL3 ADC drug zocilurtatug pelitecan (zoci, formerly ZL-1310) in combination with atezolizumab (with or without carboplatin) for first-line treatment of extensive-stage small cell lung cancer (ES-SCLC). The treatment demonstrated a high response rate, encouraging durability, and well-tolerated safety features in first-line ES-SCLC.
Lens Technology (06613) saw third-quarter net profit attributable to shareholders halve. At the close, it fell 7.38% to HK$15.18. Lens Technology's third-quarter report showed revenue of RMB19.035 billion, down 8.05% year on year, and net profit attributable to shareholders of RMB843 million, down 50.42% year on year. The decline was mainly dragged by weak consumer electronics demand, timing adjustments for the launch of key foldable phone models, and foreign exchange factors.
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