Hong Kong equities continued their downward trajectory on Wednesday, with major indices falling more than 1% during morning trade, extending the market's losing streak to five consecutive sessions this week.
The Hang Seng Index opened at 24,718.15 points, down 236.32 points or 0.95%, while the Hang Seng Tech Index kicked off the session at 4,271.73 points, sliding 58.76 points or 1.36%.
Where the selling pressure is concentrated
Base metals and gold-related stocks led the decline, with Jiangxi Copper Co Ltd dropping over 8% and CMOC Group Ltd falling more than 7%. Zijin Mining Group Co Ltd shed over 6%, while Laopu Gold Co Ltd declined more than 5%. Other notable losers included Zhongjin Gold Corp Ltd, Shandong Gold Mining Co Ltd, and Zhaojin Mining Industry Co Ltd, each down over 3%.
The selloff in precious metals followed a sharp overnight pullback in global gold prices, with COMEX gold futures falling 2.29% to US$4,358.50 per ounce and spot gold dropping 1.94% to US$4,316.76 per ounce. Analysts attributed the weakness to tighter macro rate expectations spilling over into equity markets, combined with profit-taking after a sustained rally in these sectors.
Elsewhere, technology stocks broadly declined, with Kuaishou Technology and Lenovo Group Ltd each losing over 2%. Storage-related names opened lower, and the Southern Two Times Long Samsung Electronics product fell more than 6%. Auto stocks continued their recent weakness, with XPeng Inc down over 2%.
The property sector also came under pressure, with Sun Hung Kai Properties Ltd plunging more than 6%, while Sunac China Holdings Ltd and New World Development Co Ltd each dropped over 4%. China Jinmao Holdings Group Ltd and China Vanke Co Ltd both declined more than 3%.
Strategist sees September inflection point
Looking ahead, a prominent chief economist has offered a contrarian view on the market's prospects. He remains constructive on the fundamentals of the AI technology rally and the new growth drivers of China's economy, noting that Chinese equities, particularly A-shares, currently offer compelling valuation appeal.
The strategist also highlighted that overseas liquidity conditions are poised for a reversal in September, with US 10-year Treasury yields likely to retreat after approaching the 5% level. Chinese policy support, especially regarding equity market measures, is expected to become more proactive, setting the stage for a rebound in the coming month. He advises investors to position for an autumn rally during September's pullbacks.
However, he cautioned that the coming months are likely to see a more orderly expansion of investment logic centered on earnings-driven growth, whether organic or through acquisitions, rather than the sharp valuation-recovery rallies of the past.
The projected autumn rally is expected to broaden beyond AI hardware, with a new investment narrative emerging around AI applications empowering various industries. Two primary investment tracks are anticipated: first, within the TMT sector, a differentiation between themes transitioning from speculative investment to earnings validation, alongside AI industry logic shifting from infrastructure toward applications; second, a rotation into non-AI technology sectors, where hard-core assets in resources, energy, agriculture, and finance could see renewed interest, while local state-owned enterprises may benefit from external growth through mergers, restructuring, or asset injections tied to capital market financing reform and local government debt resolution, unlocking value re-rating opportunities.
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