Asian markets weakened into the afternoon session as investors awaited the pivotal Jackson Hole address from Federal Reserve Chair Warsh, while reports of a potential new round of semiconductor tariffs from Washington added to the uncertainty. Hong Kong's Hang Seng Index eked out a modest gain of 0.07 percent to close at 25,584.79 points, while the Hang Seng Tech Index slipped 0.33 percent to 4,605.15 points.
In the Hong Kong ETF space, Tracker Fund of Hong Kong (02800) edged up 0.08 percent to HK$26.12, Hang Seng China Enterprises (02828) added 0.07 percent to HK$87.46, while CSOP Two Times Long Hang Seng Tech Daily (07226) declined 0.80 percent to HK$3.24.
Sector performance
Korean equities led the regional downturn, dragging related leveraged products sharply lower. CSOP SK Hynix Daily Two Times Leveraged (07709) plunged 8.76 percent to HK$36.44, and CSOP Two Times Long Samsung Electronics (07747) dropped 6.48 percent to HK$72.40. Market sentiment was pressured by heightened scrutiny on Warsh's speech at the Jackson Hole symposium, with Bank of America warning that a lack of clear rate-hike signals could push US 30-year Treasury yields toward 5.5 percent or beyond. Additionally, reports indicated the Trump administration is still weighing broad new tariffs on semiconductors, despite tech industry warnings that such measures could jeopardize America's leadership in artificial intelligence. The KOSPI index closed nearly 2 percent lower.
Agricultural supply chain concerns continued to drive grain-related ETFs higher. Grain ETF CSOP (159063.SZ) advanced 2.32 percent to 1.104 yuan, while Grain ETF Penghua (159698.SZ) gained 1.77 percent to 0.980 yuan. Chicago wheat futures extended their rally to the highest level in three years. HSBC noted that the agricultural supply chain is confronting multiple challenges, including the impact of Middle East conflicts and extreme weather events such as heatwaves in the Northern Hemisphere and a strengthening El Ni帽o. China Securities Co. pointed out that regional tensions have already driven up prices for fertilizers, pesticides, and crude oil, with rising grain production costs serving as one of the catalysts for this year's support-buying initiatives.
Multiple chemical sector ETFs climbed more than 2 percent, buoyed by a pricing-upgrade narrative. Chemical ETF Tianhong (159133.SZ) rose 2.33 percent to 1.141 yuan, and Chemical ETF Huabao (516020.SH) added 2.17 percent to 0.894 yuan. Analysts observed that while the immediate market shock from Middle East geopolitical tensions is gradually fading, the actual recovery cycle for global chemical capacity and supply chains remains prolonged, leaving the short-term supply tightness unlikely to fully resolve. On the demand side, downstream industries have maintained cautious operating stances with low inventory levels, suggesting that restocking demand could be unleashed in a concentrated manner ahead.
Institutional perspectives
Di Xinghua, QDII fund manager at Guohai Franklin Fund, stated that the AI rally is unlikely to follow a linear upward path. Both rising US Treasury yields and constrained electricity supply could trigger periodic pullbacks, yet the long-term trajectory remains well-defined. She emphasized adhering to first principles in investing, focusing on genuine demand, and noted that to control drawdowns, she has trimmed certain hardware positions with excessive valuations and added exposure to select cloud providers to smooth portfolio volatility.
Li Bingwei, fund manager at Dongxing Fund, believes that 2026 will be a critical year for validating AI industry chain earnings. The first half of the year was driven by a valuation-revaluation-led broad rally, which has now concluded. The second half will transition to a performance-delivery-dominated market. Hard-tech leaders with genuine technological moats, visible order pipelines, and robust cash flow capabilities may experience alpha opportunities driven by both valuation re-rating and earnings growth.
ETF listings and developments
New Energy Battery ETF ChinaAMC (158008.SZ) made its debut on the Shenzhen Stock Exchange, closing down 1.40 percent at 0.988 yuan with turnover of approximately 31.96 million yuan. The fund tracks the Guozheng New Energy Battery Index, which reflects the market performance of new energy vehicle battery industry companies listed across Shenzhen, Shanghai, and Beijing exchanges, offering investors a convenient one-stop vehicle for accessing the new energy battery supply chain.
Value ETF ChinaAMC (159096.SZ) also listed on the Shenzhen Stock Exchange, closing 0.10 percent lower at 1.001 yuan with turnover of about 46.69 million yuan. This fund tracks the Guozheng Value 100 Index, which captures the price movements of listed companies with prominent value characteristics across the three exchanges.
A-Share ETF ChinaAMC (561730.SH) debuted on the Shanghai Stock Exchange, finishing down 0.30 percent at 1.012 yuan with turnover of approximately 121 million yuan. The fund tracks the CSI A-Share Index, which samples eligible A-shares from the Shanghai, Shenzhen, and Beijing exchanges to reflect the overall performance of A-share prices.
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