August 11: Heavy caution ahead of tech earnings; Hang Seng Index drops 284 points, breaking below the 250-day moving average. Oil stocks outperform amid market weakness; high-dividend defensive plays such as E Fund High Dividend ETF merit attention.

Markets remain cautious ahead of this week’s US inflation data and developments in the Middle East. US equities closed slightly lower overnight, while Hong Kong stocks also await Tencent’s earnings release tomorrow. The Hang Seng Index opened up 61 points today and briefly reclaimed the 26,000 level, reaching an intraday high of 26,060. However, after testing the 26,000 mark, it reversed course downward. Losses widened among auto, tech, and gold mining stocks, dragging the index into negative territory. In the afternoon, a sharp pullback in A-shares and sudden selling pressure in biotech stocks further weighed on sentiment, causing the Hang Seng Index to close below its 250-day moving average at 25,652, down 284 points or 1.1%. Trading volume contracted significantly, totaling just HK$210.9 billion for the day. The Hang Seng China Enterprises Index closed at 8,528, down 93 points or 1.09%. The Hang Seng Tech Index ended at 4,824, down 95 points or 1.93%. Southbound capital recorded a net outflow of approximately RMB 1.4 billion.

Tech giants are set to report earnings this week, with market focus on AI-related capital expenditures and monetization capabilities, prompting more cautious trading. Tencent ( $TENCENT (00700.HK)$ 0700) rose initially but closed lower, down 2.2% at HK$470.8. JD.com ( $JD-SW (09618.HK)$ Kuaishou (1024) fell 2.99%, closing at HK$126.5; $KUAISHOU-W (01024.HK)$ Baidu (9888) dropped 3.79%, closing at HK$42.64; $BIDU-W (09888.HK)$ Meituan (3690) declined 2.52%, closing at HK$104.6; $MEITUAN-W (03690.HK)$ Meituan (3690) fell 0.91%, closing at HK$93.05. Alibaba (9988) $BABA-W (09988.HK)$ rose nearly 3% in early trading to an over one-month high of HK$130.3, amid reports that its Alibaba Cloud has shortened delivery timelines for large-scale AI data centers to 100 days and plans to more than triple global capacity this year; however, the stock retreated alongside the broader market in the afternoon, ending down 0.24% at HK$126.4; $XIAOMI-W (01810.HK)$ Xiaomi (1810) dropped 3.48%, closing at HK$26.66. JPMorgan expects its second-quarter results to be lackluster, citing pressure on smartphone gross margins, slowing IoT growth, and weak momentum in electric vehicles, and has lowered its target price to HK$31 with a 'Neutral' rating.

　
Prospects for US-Iran negotiations were again clouded as Trump publicly criticized Iran's demand for war reparations, dampening market optimism about a swift agreement and reopening of the Strait of Hormuz. WTI and Brent crude futures surged nearly 5% earlier in the day, lifting oil stocks against the market trend. CNOOC $CNOOC (00883.HK)$ (0883) rose 3.59%, closing at HK$24.24, marking the best-performing blue chip of the day; PetroChina $PETROCHINA (00857.HK)$ (0857) gained 1.78%, closing at HK$9.735; Sinopec $SINOPEC CORP (00386.HK)$ (0386) edged down 0.23%, closing at HK$4.31.

Spot gold prices broke through the $4,400 mark but saw a sharp pullback in the afternoon. Recently overheated gold mining and gold-related stocks significantly retraced, with Laopu Gold $LAOPU GOLD (06181.HK)$ (6181) down 8.49% to close at HK$362; Lingbao Gold $LINGBAO GOLD (03330.HK)$ (3330) down 8.07% to close at HK$22.32; Zijin Mining $ZIJIN MINING (02899.HK)$ (2899) down 5.8% to close at HK$35.38; Zijin Gold International $ZIJIN GOLD INTL (02259.HK)$ (2259) down 7.08% to close at HK$133.8; China Gold International $CHINAGOLDINTL (02099.HK)$ (2099) down 5.57%; Zhaojin Mining ( $ZHAOJIN MINING (01818.HK)$ 1818) down 5.06% to close at HK$23.62; CMOC Group $CMOC (03993.HK)$ (3993) down 5.24% to close at HK$17.9; Chow Tai Fook $CHOW TAI FOOK (01929.HK)$ (1929) down 3.45% to close at HK$12.58.

Aside from resource stocks weakening today, auto stocks also faced selling pressure. Reports indicated that China’s auto dealer inventory coefficient stood at 1.48 in July, down 6.3% month-over-month but up 9.6% year-over-year. Auto stocks fell across the board, including Nio $NIO-SW (09866.HK)$ Geely Auto (9866) fell 4.37%, closing at HK$36.30; $GEELY AUTO (00175.HK)$ BYD (0175) dropped 4.26%, closing at HK$18.20; $BYD COMPANY (01211.HK)$ BYD Electronics (1211) declined 2.82%, closing at HK$89.70; $BYD ELECTRONIC (00285.HK)$ XPeng (0285) fell 4.19%, closing at HK$23.34; $XPENG-W (09868.HK)$ Li Auto (9868) dropped 2.93%, closing at HK$45.74; $LI AUTO-W (02015.HK)$ Li Auto (2015) fell 2.08%, closing at HK$49.06.

Although the innovative drug sector continued to strengthen in the early session, its gains narrowed significantly in the afternoon. $BEONE MEDICINES (06160.HK)$ BeiGene (6160) rose 2.63%, closing at HK$218.80; Hansoh Pharmaceutical (3692) gained 0.81%, closing at HK$34.82; Wuxi Apptec $WUXI APPTEC (02359.HK)$ (2359) advanced 0.56%, closing at HK$199.10; Wuxi Bio $WUXI BIO (02269.HK)$ (2269) reversed to a 0.3% loss, closing at HK$45.98.

In the AI concept stock sector, FIT HON TENG$FIT HON TENG (06088.HK)$(6088) reported a 20.9% increase in interim profit to US$38.097 million, but announced no interim dividend, sending its share price plunging 14.14% to close at HK$5.13; Chukang Laminate Board$KB LAMINATES (01888.HK)$(1888)'s Jiangxi New Materials Industrial Park broke ground last week, with a total investment of RMB 3 billion, focusing on AI computing‑power materials. However, the stock failed to gain traction today, closing down 2.12% at RMB 34.96; AI large‑model stock MiniMax…$MINIMAX-W (00100.HK)$(0100) has been included in the HKEX's Tech 100 Index, effective Thursday, with its share price rising another 1.74% to close at HK$328; Zhipu.$Z.AI (02513.HK)$(2513) fell 4.8%, closing at 1,192 yuan; Tsugami Machine Tool China (1651) received its first coverage from Citigroup, which assigned a "Buy/High Risk" rating with a target price of 72 yuan, while the stock rose 4.99% to close at 57.85 yuan.

Among other individual stocks, Wharf Holdings ($WHARF HOLDINGS (00004.HK)$0004) Announced that its first-half underlying net profit fell 17% year-on-year, sending its share price down 4.29% to close at HK$20.52; Xinyi Glass$XINYI GLASS (00868.HK)$(0868) fell 3.6%, closing at 9.115 yuan; China Life Insurance$CHINA LIFE (02628.HK)$(2628) fell 3.07%, closing at 27.2 yuan; Wireless Group$TVB (00511.HK)$(0511) plans to form a joint venture with GGV Capital to provide AI computing services, driving its share price up 5.42% to close at HK$2.725; QTI Technology$Q TECH (01478.HK)$ (1478) announced that July camera module sales fell 3.2% year-over-year; its share price dropped 7.21%, closing at HK$6.69. Everbright Water $CEB WATER (01857.HK)$ (1857) reported an 8% decline in interim net profit, maintaining its dividend at HK$0.0609 per share; the stock rose 1.49% today, closing at HK$1.36.

The Hang Seng Index fell 284 points today, breaking below its 250-day moving average, while tech and internet stocks declined throughout the session. With the broader market lacking a clear direction, investors may consider allocating part of their capital to income-generating stocks—such as the iShares Asia Pacific Dividend ETF $E FUND (HK) MSCI Asia Pacific Select High Dividend Index ETF (03483.HK)$ (3483), which closed at HK$18.15 today, up 0.11%, hitting a new five-day high and showing relatively stable performance amid the market downturn. ETF 3483 primarily tracks the MSCI Asia Pacific Select High Dividend Yield Index, selecting approximately 100 quality stocks with consistently high dividend yields from markets including Hong Kong, Australia, and Japan. Constituents are first screened based on liquidity, dividend sustainability, quality, and past price performance to avoid the 'value traps' commonly associated with traditional high-dividend strategies. The top 100 stocks are then selected based on their average dividend yield over the past three years and weighted by market capitalization adjusted by dividend yield scores to ensure diversification.

Although the market declined today, 3483’s underlying holdings are primarily defensive sectors such as energy and financials. Energy accounts for approximately 26%, financial services about 25%, industrials around 13%, and basic materials roughly 12%. Major holdings include PetroChina $PETROCHINA (00857.HK)$ (0857), BHP, China Shenhua $CHINA SHENHUA (01088.HK)$ (1088), and Bank of China $BANK OF CHINA (03988.HK)$ (3988). Energy stocks broadly outperformed the market today, providing support to 3483. Currently, 3483 distributes dividends semi-annually, with its latest payout at HK$0.45 per unit, implying a dividend yield of approximately 5.4%. This product is better suited for long-term investors seeking stable income, regional diversification, and defensive allocation, though investors should note the relatively high weightings in energy and financial sectors, meaning short-term oil prices and interest rate trends could still impact its performance.

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