Hang Seng Index rose 137 points, recovering some losses; biotech and AI hardware led gains. Biotech stocks drove iShares HKEX Tech 100 ETF (managed by E Fund) to outperform the Hang Seng Tech Index—tech sector investors should take note.

Fed Chair Waller stated that if inflation data remains hot in the coming weeks or market expectations for rate hikes intensify, the Fed is prepared to raise interest rates, causing U.S. stocks to decline on Thursday. Hong Kong’s market opened 3 points lower on Friday but rebounded amid volatility, as broadening gains in A-shares and strong performance in local innovative drug-related stocks lifted the Hang Seng Index. However, the index faced resistance at its 250-day moving average, closing the day at 25,668 points, up 137 points or 0.54%, with total turnover of HK$259.6 billion. The Hang Seng China Enterprises Index closed at 8,531 points, up 32 points or 0.39%. The Hang Seng Tech Index ended at 4,858 points, gaining 37 points or 0.78%. Southbound capital recorded net outflows of approximately HK$800 million for the third consecutive day.

Biotech stocks were the biggest highlight on Friday. Wuxi Bio $WUXI BIO (02269.HK)$ (2269) rose 10.83% to close at HK$45.86, hitting a new high and becoming the top performer among blue chips; Wuxi Apptec $WUXI APPTEC (02359.HK)$ (2359) gained 7.01% to close at HK$192.30, also reaching a new high; Wuxi XDC $WUXI XDC (02268.HK)$ (2268) climbed 11.82% to close at HK$61.95; BeiGene $BEONE MEDICINES (06160.HK)$ (6160) rose 5.26% to close at HK$210.00; Hansoh Pharma $HANSOH PHARMA (03692.HK)$ (3692) gained 3.91% to close at HK$32.92; Sino Biopharmaceutical $SBP GROUP (01177.HK)$ (1177) rose 3.35% to close at HK$5.095; CSPC Pharma $CSPC PHARMA (01093.HK)$ (1093) advanced 2.24% to close at HK$8.69; Zai Lab $ZAI LAB (09688.HK)$ (9688) reported a widened Q2 loss of USD 50.825 million, but total revenue of USD 106.3 million significantly beat market expectations, driving its share price up sharply by 18.38% to close at HK$17.20.

Wharf Real Estate Investment $WHARF REIC (01997.HK)$ After raising its dividend payout ratio to 90% in 1997, the stock received broad endorsement from major brokerages and rose another 6.93% on Friday, closing at HK$32.08. Solar stocks rebounded on Friday, lifted by news that mainland polysilicon producers proposed measures against 'intra-industry undercutting,' urging sales not below cost price; GCL Technology $GCL TECH (03800.HK)$ (3800) rose 8.96%; Xinte Energy $XINTE ENERGY (01799.HK)$ (1799) gained 13.53%; Xinyi Solar $XINYI SOLAR (00968.HK)$ (0968) rose 5.17%, closing at HK$2.44

AI-related and hardware stocks are approaching earnings season, and these shares collectively rebounded on Friday. Lenovo Group $LENOVO GROUP (00992.HK)$ (0992) rose 8.33%, closing at HK$28.10, hitting a new high; SMIC $SMIC (00981.HK)$ (0981) gained 2.37%, closing at HK$66.90; KB Laminates $KB LAMINATES (01888.HK)$ (1888) surged 9.91%, closing at HK$38.36; Yangtze Optical Fibre $YOFC (06869.HK)$ (6869) rose 5.8%, closing at HK$124.10; Shenghong Technology $VGT (02476.HK)$ (2476) reported earnings today, rising 10.91% to close at HK$256.20; Sunic Microelectronics $CFMEE (09630.HK)$ (9630) rose 8.04%, closing at HK$368.4; Montage Technology $MONTAGE TECH (06809.HK)$ (6809) rose 3.1%, closing at HK$269.2; GigaDevice $GIGADEVICE (03986.HK)$ (3986) rose 6.8%, closing at HK$528. ByteDance is reportedly training an AI model with 10 trillion parameters—three times larger than Moonshot’s Kimi K3—boosting AI-related stocks. Zhipu AI $Z.AI (02513.HK)$ (2513) rose 14.63%, closing at HK$1,246; MiniMax $MINIMAX-W (00100.HK)$ (0100) rose another 9.83% on its second day in Stock Connect, closing at HK$326.4.

Internet stocks, however, were generally weak. Alibaba $BABA-W (09988.HK)$ (9988) fell 0.48%, closing at HK$123.8; Tencent $TENCENT (00700.HK)$ (0700) edged down 0.08%, closing at HK$478.8; Baidu $BIDU-W (09888.HK)$ (9888) dropped 0.28%, closing at HK$106.8; Meituan $MEITUAN-W (03690.HK)$ (3690) was unchanged, closing at HK$92.2; Xiaomi $XIAOMI-W (01810.HK)$ (1810) rose 0.74% to close at HK$27.06. Additionally, on Thursday, reports emerged that overseas investment income from insurance policies would be subject to taxation, dragging down local insurance and banking stocks. However, the Insurance Authority later clarified that the requirement to tax overseas investment income has always existed, and the market should not overinterpret this news. Insurance and banking stocks rebounded slightly on Friday, with AIA $AIA (01299.HK)$ (1299) rising 1.37% to close at HK$74.15; HSBC $HSBC HOLDINGS (00005.HK)$ (0005) gained 0.69% to close at HK$161.2; Standard Chartered $STANCHART (02888.HK)$ (2888) fell 0.94% to close at HK$232.2.

Gold prices rose to around USD 4,400, supported by major banks raising their gold price forecasts, boosting gold mining stocks. Zijin Mining $ZIJIN MINING (02899.HK)$ (2899) rose 3.12% to close at HK$36.4; Zijin Gold International $ZIJIN GOLD INTL (02259.HK)$ (2259) gained 4.34%; China Gold International $CHINAGOLDINTL (02099.HK)$ (2099) rose 3.99%; Lingbao Gold $LINGBAO GOLD (03330.HK)$ (3330) jumped 6.55%; Zhaojin Mining $ZHAOJIN MINING (01818.HK)$ (1818) gained 2.4%. In the shipping sector, Pacific Basin $PACIFIC BASIN (02343.HK)$ Orient Overseas (2343) reported a 3.1-fold increase in interim net profit, with dividends surging nearly 8.7-fold; its share price rose 13.77% to close at HK$3.80, hitting a new high. $OOIL (00316.HK)$ OOIL (0316) rose 3.27% to close at HK$148.60; $SITC (01308.HK)$ SITC International (1308) gained 2.49%; $COSCO SHIP ENGY (01138.HK)$ COSCO Shipping Energy (1138) rose 2.58%.

Among other stocks, WH Group (0288) fell 3.1% to close at HK$7.965, making it the worst-performing blue chip; $WH GROUP (00288.HK)$ China Mengniu Dairy (2319) dropped 2.41% to close at HK$18.61. $MENGNIU DAIRY (02319.HK)$ Local property stocks generally weakened amid rate hike expectations; Sun Hung Kai Properties (0016) declined 0.5% to close at HK$115.40; $SHK PPT (00016.HK)$ Sun Hung Kai Properties (0083) fell 1.7% to close at HK$10.19; $SINO LAND (00083.HK)$ Henderson Land (0012) dropped 2.2% to close at HK$26.88; $HENDERSON LAND (00012.HK)$ Hang Lung Properties $HANG LUNG PPT (00101.HK)$ (0101) fell 0.6%, closing at HK$7.335.

On the IPO front, Nason Tech $NASN TECH (02261.HK)$ (2261) closed at HK$17.1 on its debut, up 64.1% from its IPO price of HK$10.42.

Hong Kong stocks rebounded today, driven by biotech and AI hardware shares, with the Hang Seng Tech Index rising 0.78% to close at 4,858 points. Notably, E Fund Hong Kong Exchange Tech 100 ETF $E Fund HKEX Tech 100 ETF (03456.HK)$ (3456) closed at HK$8.465, up 1.68%, outperforming the tech index, primarily benefiting from strong performance in its biotech holdings. ETF 3456 tracks the Hong Kong Exchange Tech 100 Index. Unlike typical tech ETFs—particularly those tracking the Hang Seng Tech Index, which selects only 30 tech-themed stocks with the top 10 constituents accounting for approximately 70.8% of the index weight and dominated by platform giants such as Alibaba, Tencent, Meituan, and Xiaomi—the Hong Kong Exchange Tech 100 Index comprises 100 constituents with a more diversified top-10 weighting. This offers a more comprehensive reflection of the overall Hong Kong tech sector rather than being driven by a few mega-cap names. The index covers six cutting-edge themes: artificial intelligence, biotech and pharmaceuticals, electric vehicles and autonomous driving, information technology, internet, and robotics. Each constituent is capped at a maximum weight of 12%, preventing any single stock from overly influencing index performance—a stark contrast to the Hang Seng Tech Index’s high concentration. On Friday, biotech stocks surged sharply, with Wuxi Bio (2269) up 10.83%, Wuxi Apptec (2359) up 7.01%, and BeiGene (6160) up 5.26%. As index constituents, their gains directly contributed to ETF 3456 outperforming the broader tech index. This multi-theme allocation ensures the ETF isn’t overly reliant on any single sector, making it suitable for investors seeking broad exposure to Hong Kong-listed tech and innovation companies with a more balanced portfolio.

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