To The Moon

The Hong Kong stock market ended lower on Friday, with the technology sector leading the decline while energy and coal stocks saw significant gains.

The Hang Seng Index closed down 1.22%, while the Hang Seng Tech Index fell by 2.71%. The Hang Seng China Enterprises Index declined by 1.13%. The total market turnover for the day reached HK$364 billion, with southbound trading recording a net inflow of HK$11.318 billion.

Energy Stocks Defy Market Downturn

Shares in the oil and gas sector moved higher against the broader market trend, with gains accelerating in the afternoon session. Shandong Molong Petroleum Machinery Company Limited (ASX: SHANDONG MOLONG) surged 25.75% at the close. Other gainers in the sector included BQ Energy Services, which rose 9.33%, and China National Offshore Oil Corporation, which added 1.96%.

The rally followed reports of regional tensions. According to international media, a petrochemical company in Iran's Khuzestan province was attacked, damaging some facilities. Separately, the Israeli military stated it had detected missiles launched from Iranian territory and activated its air defense systems, with sirens sounding in Jerusalem.

Major Tech Stocks Experience Sharp Decline

The technology sector was under heavy selling pressure. MINIMAX-W shares dropped 8.14%, while Baidu Group-SW fell 7.64%. Other notable decliners included Hua Hong Semiconductor, down 5.64%, BYD Electronic, which lost 4.62%, and Sensetime-W, declining 5.42%. Kuaishou-W and Meituan-W fell 5.80% and 4.63% respectively. Alibaba-W and Lenovo Group dropped 2.94% and 1.29%, while JD.com-SW decreased by 1.99%.

Coal Sector Shares Post Collective Gains

Coal mining stocks also performed well amidst the broader market weakness. Yankuang Energy Group advanced 2.07%, Mongolia Energy Corporation gained 1.82%, China Shenhua Energy rose 0.91%, and China Coal Energy added 0.39%.

Analysts noted that recent safety incidents could lead to stricter regulatory oversight, potentially tightening domestic coal supply, particularly for coking coal. With peak summer demand season approaching, and factors like the El Niño weather pattern potentially amplifying seasonal effects, coal prices during this year's peak period are expected to exceed expectations.

Dajin Heavy Industry Falls Below IPO Price

Dajin Heavy Industry shares declined 5.12% on their second day of trading in Hong Kong, closing at HK$63 per share, which is below its initial public offering price. The stock's turnover for the day was HK$326 million.

The company, which was already listed on the Shenzhen Stock Exchange since 2010, officially began trading on the Hong Kong Stock Exchange main board earlier this week. It focuses on the global deep-sea wind power market and is reportedly the only supplier in the Asia-Pacific region capable of delivering monopiles to Europe in bulk. According to industry research, the company ranked first by sales value among offshore wind power foundation equipment suppliers for the European market in the first half of 2025.

Hong Kong Government Supports AI Development

Separately, Hong Kong's Secretary for Innovation, Technology and Industry, Sun Dong, announced that a newly established artificial intelligence research institute will commence operations in the second half of the year. The institute will coordinate frontier research, commercialization of results, governance recommendations, and international cooperation.

The government is also preparing to set up a strategic committee on "AI+ and Industrial Development," initially focusing on areas such as embodied intelligence and life sciences to promote industrial upgrading driven by AI.

Secretary Sun further stated that under the InnoHK initiative, 16 research laboratories are related to AI, gathering nearly 1,200 top scientific research talents. An AI funding scheme has approved nearly HK$1.4 billion in grants for over 30 projects to support local AI research and development. A separate "Industry-University-Research 1+ Scheme" has supported 73 projects, one-third of which involve AI applications.

To promote the healthy development of AI, the Digital Policy Office has formulated an "AI Ethics Framework" and a "Hong Kong Generative AI Technology and Application Guide." The Department of Justice is actively promoting the work of an inter-departmental task force to comprehensively review the legal framework for the wider application of AI and to study targeted and practical solutions based on Hong Kong's specific environment.