Hong Kong's three major stock indexes all closed lower on August 6, with the Hang Seng Index dropping 1.49% to 25,530.28, the Hang Seng Tech Index falling 2.28%, and the Hang Seng China Enterprises Index losing 1.22%.
Internet and tech stocks broadly declined, with Baidu sliding over 4%, while Alibaba, Xiaomi, Kuaishou, Tencent, and JD.com all dropped more than 2%. In contrast, coal stocks were active, with China Coal Energy Company Limited rising over 2%. Lithium battery stocks led the losses, as CATL fell more than 5%. Auto stocks also saw widespread declines, with Leapmotor dropping over 4%.
Coal stocks remained active as China Coal Energy Company Limited gained over 2%. On August 5, the thermal coal price index rose across the board, with 5,500 kcal grade coal up 5 yuan per tonne to 839 yuan per tonne. The continued strength in coal prices has directly boosted expectations for coal company profitability. Under the extension of the 2025 "anti-involution" policy strictly controlling coal overcapacity, combined with tighter safety supervision and production halts at some mines for rectification, the supply-side contraction trend in domestic thermal coal is expected to persist into the second half of 2026. Some institutions noted that companies with a high proportion of long-term contracts, such as China Shenhua and China Coal Energy Company Limited, are likely to show stronger earnings stability, while undervalued names like Yankuang Energy (Hong Kong-listed) may also see a valuation recovery.
Lithium battery stocks led the declines, with CATL falling over 5%. On July 17, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued a notice to gradually restore the consumption tax exemption on certain battery products, including lithium primary cells and lithium-ion batteries, which were previously exempted. The policy sets a two-tiered rate: 2% from September 1, 2026, to December 31, 2026, and an increase to 4% from January 1, 2027 onwards. In response to the battery consumption tax policy adjustment, companies are actively pushing for downstream cost pass-through, with some battery makers already issuing price adjustment letters to customers.
Auto stocks broadly declined, with Leapmotor falling over 4%. According to data from the China Passenger Car Association, from July 1 to 31, national passenger car retail sales totaled 1.506 million units, down 18% year-on-year and 6% from the previous month. Cumulative retail sales for the year to date stand at 10.207 million units, down 20% year-on-year. During the same period, new energy passenger car retail sales reached 970,000 units, down 2% year-on-year and 4% from the previous month, with cumulative sales for the year to date at 5.675 million units, down 12% year-on-year.
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