The Federal Reserve's shift towards a neutral-to-hawkish stance and rising rate hike expectations have placed pressure on Hong Kong stocks, with the three major indices declining. Policy reforms and semiconductor industry trends combined to support a continued strong performance for the Kechuang 50 ETF, while the newly hawkish stance from Chair Wash led to a downturn for gold ETFs. At the close, the Hang Seng Index fell 1.59% to 23,924.81 points, with a full-day turnover of HK$358.715 billion. The Hang Seng Tech Index declined 1.39% to 4,604.35 points.
Among major Hong Kong-listed ETFs, the Tracker Fund (02800) closed down 1.62% at HK$24.28. The CSOP 2x Long SK Hynix ETF (07709) rose 11.19% to HK$161. The CSOP Hang Seng Tech Index ETF (03033) fell 1.18% to HK$4.512.
Key Sector Performance
Policy Reforms and Semiconductor Trends Support Kechuang 50 ETF
Driven by the dual forces of policy reforms and semiconductor industry momentum, the Kechuang 50 ETF continued its strong run. At the close, the Bosera Kechuang 50 ETF (02832) gained 3.96% to HK$13.91. The PP Kechuang 50 ETF (03151) rose 3.85% to HK$13.48. The CSOP SSE STAR Market 50 ETF (03109) advanced 3.7% to HK$18.52.
On June 17, CSRC Chairman Wu Qing stated at the 2026 Lujiazui Forum that the scope of the fifth listing standard would be expanded to include the artificial intelligence sector to actively support high-quality large AI model companies seeking listings. The Shanghai Stock Exchange noted that since last year, several companies in fields like quantum technology, bio-manufacturing, and brain-computer interfaces have expressed interest in listing on the STAR Market. To better guide eligible companies in future industries to apply for the STAR Market, enhance its inclusiveness and adaptability, and support cutting-edge technological innovation and new quality productive forces, regulations have been revised to update the specific industry scope the STAR Market focuses on.
Harvest Fund's Tian Yuanguang noted that the technology sector's performance in the first half of the year exceeded expectations. This was driven by a fundamentals-led semiconductor supercycle, with global semiconductor sales reaching a record high of $298.5 billion in Q1 2026, a year-on-year increase of 79.2%. AI computing power demand has expanded from isolated hotspots, with high concurrent growth in demand for HBM, AI chips, and edge inference chips. The sector's prosperity has surpassed initial institutional forecasts.
Hawkish Fed Stance Weighs on Gold ETFs
New Fed Chair Wash's notably hawkish debut led to a decline for gold ETFs. At the close, the E Fund Gold Miners ETF (02824) fell 3.9% to HK$9.475. The Guotai Gold Stock ETF (517400) dropped 2.89% to RMB 1.447.
Following its June meeting, the Federal Reserve kept interest rates unchanged, aligning with market expectations. However, the policy statement under new Chair Wash showed a clear hawkish tilt, no longer reiterating a focus on "both employment and inflation risks" but instead emphasizing "stable prices" as the primary goal. Influenced by the Fed's hawkish signals, U.S. Treasury yields rose across all maturities, pressuring risk assets and leading to a broad decline for the three major U.S. stock indices on Wednesday.
Huatai Futures commented that new Fed Chair Wash adjusted the communication framework in his first quarterly press conference, downplaying the weight of dot plot guidance and cautioning markets against overinterpreting committee members' rate forecasts, noting he did not submit a personal projection. Wash did not commit to a fixed rate path, emphasizing that rates could be adjusted in either direction at any meeting and that the Fed would not cut rates simply to stimulate the economy. Huatai Futures believes that, in the long term, AI's potential to boost productivity could help alleviate inflationary pressures after 2027, forming a core prerequisite for rate cuts. Currently, tightening sentiment is growing, which may slightly dampen investment demand for gold, suggesting prices may oscillate in the near term.
Institutional Perspectives
E Fund Manager Cheng Xi stated that as AI Agent applications, AI programming, multimodal applications, and enterprise-side inference demand continue to materialize, the commercialization loop for AI applications is expected to improve further, continuing to drive demand for underlying computing and network infrastructure. Additionally, humanoid robots are transitioning from thematic expectations to order validation. Subsequent orders for core components and the iteration pace of whole-machine manufacturers will become key catalysts for market attention, with a focus on overseas customer orders in the second half of the year.
ETF Market Activity
The New Energy Battery ETF HuaBao (159071) debuted, closing down 0.67% at RMB 1.036. The fund tracks the CNI New Energy Battery Index, focusing on battery manufacturing (including power and energy storage batteries), energy storage inverters, system integration, thermal management, fire safety, and related areas.
The Rare Metals ETF Southern (159062) debuted, closing up 1.18% at RMB 1.025. The fund tracks the CSI Rare Metals Theme Index, concentrating on listed companies involved in the mining, smelting, and processing of rare metals.
The Robotics ETF HuaAn (159039) debuted, closing up 2.8% at RMB 1.027. The fund tracks the CNI Robotics Industry Index, with a core focus on industrial chain segments including actuators, reducers, lead screws, sensors, motors, structural components, and robot bodies.
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