Auto, consumer, and tech-internet stocks led a rebound, lifting the Hang Seng Index by 497 points; AI semiconductor stocks remained under pressure. Investors bullish on the long-term prospects of Hong Kong tech stocks may consider the E Fund HKEX Tech 100 ETF.

The global semiconductor sector’s correction continues, with South Korean stocks falling nearly 6% again, while ** and Japanese markets also weakened. Hong Kong stocks were dragged lower early in the session by declines in AI hardware names, but the Hang Seng Index stabilized near its 100-day moving average and gradually recovered. In the afternoon, mainland A-shares reversed from losses to gains, prompting inflows into auto, domestic consumption, and large-cap tech-internet stocks, accelerating the HSI’s rally. The index closed at 25,807, up 497 points or 1.96%, with turnover of HK$312.2 billion. The Hang Seng China Enterprises Index ended at 8,623, up 187 points or 2.22%. The Hang Seng Tech Index closed at 4,864, rising 134 points or 2.84%. Southbound capital outflows totaled RMB 5.5 billion, marking the fifth consecutive day of net outflows.

The auto sector stood out notably today, serving as the main driver behind the broader market rally, with Li Auto $LI AUTO-W (02015.HK)$ (2015) gaining 9.9% to close at HK$54.60, making it the best-performing blue chip. The company stated that earlier headlight supply constraints had forced a planned production cut of approximately 4,000 units for the i6 model in mid-to-late July, but supplies have now been restored, and both production capacity and delivery schedules have returned to normal; Xiaomi $XIAOMI-W (01810.HK)$ Geely Auto (1810) rose 8.95% to close at HK$31.88. The market is focused on the new vehicle technology launch event scheduled for Thursday evening, where two smart, flexible large-space SUVs will be unveiled. $GEELY AUTO (00175.HK)$ BYD (0175) gained 6.17% to close at HK$20.30. $BYD COMPANY (01211.HK)$ XPeng Motors (1211) climbed 4.23% to close at HK$93.60. $XPENG-W (09868.HK)$ XPeng Motors (9868) rose 4.42% to close at HK$51.75.

　
The market is optimistic that the Politburo meeting at the end of July will introduce measures to boost consumption, driving consumer stocks broadly higher. Nongfu Spring $NONGFU SPRING (09633.HK)$ Nongfu Spring (9633) advanced 7.26% to close at HK$44.90; Li Ning $LI NING (02331.HK)$ Li Ning (2331) rose 4.52% to close at HK$15.27; China Resources Beer $CHINA RES BEER (00291.HK)$ China Resources Beer (0291) gained 3.54% to close at HK$24.54. Meanwhile, multiple brokerages note that June to August is the traditional peak season for beer consumption, and the anticipated El Niño phenomenon in 2026 is expected to bring prolonged hot weather, which could significantly boost beer demand across all consumption scenarios. $MENGNIU DAIRY (02319.HK)$ Mengniu Dairy (2319) rose 3.43% to close at HK$19.32, hitting a record high; Master Kong $TINGYI (00322.HK)$ Master Kong (0322) increased 3.23% to close at HK$12.15. Budweiser APAC $BUD APAC (01876.HK)$ (1876) rose 3.04%, closing at HK$6.79, as the market also awaits its upcoming interim results.

Traditional tech stocks also contributed to today's market rally. Tencent $TENCENT (00700.HK)$ (0700) gained 4.29%, closing at HK$466.4; Meituan $MEITUAN-W (03690.HK)$ (3690) rose 2.22%, closing at HK$92.3; Alibaba $BABA-W (09988.HK)$ (9988) advanced 1.43%, closing at HK$113.6; JD.com $JD-SW (09618.HK)$ (9618) climbed 1.69%, closing at HK$126.2; Baidu $BIDU-SW (09888.HK)$ (9888) rose 1.38%, closing at HK$103; Kuaishou $KUAISHOU-W (01024.HK)$ (1024) gained 1.09%, closing at HK$42.76; NetEase $NTES (09999.HK)$ (9999) rose 1.8%, closing at HK$203.2. Meanwhile, the recently strong financial sector continued to hit new highs, with Standard Chartered $STANCHART (02888.HK)$ (2888) reporting a pre-tax profit of US$4.784 billion for the first half, up 9.15% year-on-year, and launching a US$1 billion share buyback program; its shares rose 3.86%, closing at HK$231.4, reaching a new high. HSBC $HSBC HOLDINGS (00005.HK)$ ICBC (0005) rose 1.67% to close at HK$164.70, hitting a new high; $ICBC (01398.HK)$ Industrial and Commercial Bank of China (1398) gained 1.63% to close at HK$7.48, also reaching a new high; $CCB (00939.HK)$ China Construction Bank (0939) advanced 0.88% to close at HK$9.21, likewise setting a new high.

AI hardware and semiconductor stocks continued their decline. SK Hynix $SK Hynix (000660.KR)$ (000660) dropped after earnings, while SMIC $SMIC (00981.HK)$ (0981) fell 2.75% to close at HK$67.20; Huahong Semiconductor $HUA HONG GRACE (01347.HK)$ (1347) declined 1.08% to close at HK$136.80; Lenovo Group $LENOVO GROUP (00992.HK)$ (0992) dropped 1.88% to close at HK$22.98; Kingboard Laminates $KB LAMINATES (01888.HK)$ (1888) plunged 6.52% to close at HK$31.54; Kingboard Holdings $KINGBOARD HLDG (00148.HK)$ (0148) slipped 1.56% to close at HK$41.56; Yangtze Optical Fibre and Cable $YOFC (06869.HK)$ (6869) fell 5.94% to close at HK$102.8; Tianshu Zhixin $ILUVATAR COREX (09903.HK)$ (9903) dropped 13.5% to close at HK$442.

Among other stocks, CATL $CATL (03750.HK)$ (3750), named JPMorgan’s top pick in China’s battery supply chain, rose 2.65% to close at HK$619.5; Xinyi Solar $XINYI SOLAR (00968.HK)$ (0968) gained 4.23% to close at HK$2.22. The market reported that regulators will issue guidance on price compliance in the photovoltaic industry; GCL Technology $GCL TECH (03800.HK)$ (3800) rose 3.39% to close at HK$0.61, and Flat Glass Group $FLAT GLASS (06865.HK)$ (6865) gained 4.62% to close at HK$6.79; Laopu Gold ( $LAOPU GOLD (06181.HK)$ 6181) continued to face pressure after plunging nearly 24% yesterday, falling another 4.83% to close at HK$287.6. The market is still digesting its sharp sequential decline in Q2 revenue and earnings, as well as multiple brokerages cutting their target prices. In contrast, Trip.com (9961) rose 5.1% to close at HK$367, with JPMorgan noting that recent rectification measures won’t impact its profitability.

Hong Kong stocks performed strongly today, led by auto, domestic consumption, and large-cap tech names. Investors interested in gaining diversified exposure to these sectors may consider E Fund Hong Kong Exchange Tech 100 ETF $E Fund HKEX Tech 100 ETF (03456.HK)$ (3456), which closed at HK$8.285 today, up 2.41%. ETF 3456 tracks the Hong Kong Exchange Tech 100 Index, offering exposure to a basket of Hong Kong-listed companies with technology or new economy characteristics to capture sector-wide performance. Its holdings are concentrated in large platform companies and tech leaders, including Tencent (0700), Alibaba (9988), Xiaomi (1810), Meituan (3690), SMIC (0981), and BYD (1211). As such, movements in key constituent stocks directly affect the ETF’s performance. Today, several major constituents rose: Tencent gained 4.29% to close at HK$466.4; Xiaomi surged 8.95% to HK$31.88 on market anticipation of its upcoming vehicle technology launch event on Thursday; Meituan rose 2.22%, Alibaba climbed 1.43%, and BYD gained 4.23%, all providing support to ETF 3456. This ETF suits investors seeking single-ticket exposure to large-cap Hong Kong tech, internet, smart EVs, semiconductors, and innovative healthcare stocks. However, while it offers more diversification than holding individual stocks, investors should note that the ETF remains exposed to risks tied to tech heavyweight performance, semiconductor cycles, AI-related capital spending, and overall market risk appetite, which may lead to significant short-term volatility. It is best suited for investors with a long-term bullish view on Hong Kong tech who can tolerate higher volatility and prefer not to concentrate bets on just one or two tech names.

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