Optical communication concept stocks are leading the losses in Hong Kong trading today, with sector sentiment turning bearish amid renewed trade policy concerns. As of the latest update, ZJ INNOLIGHT (03308) has plunged 12.11% to HK$1002, while CIG (06166) is down 5.81% to HK$90.8.

Other notable decliners include TIME INTERCON (01729), which has slipped 2.95% to HK$14.8, and YOFC (06869), which is trading 3% lower at HK$135.8.

On the news front, according to CommunicationsDaily, a leading US communications industry publication, the Information Technology Industry Council (ITI) formally expressed opposition to the US Federal Communications Commission (FCC) last week, urging the regulator not to include foreign-made optical modules on any restriction list. However, the market has interpreted this development negatively — the fact that ITI, as a representative of the US tech industry, felt compelled to publicly object suggests the FCC may indeed be considering such restrictions, which has intensified worries about the export outlook for optical modules.

In a previous research report, CITIC Securities Hong Kong noted that the FCC's draft proposal would be difficult to implement in practice. Chinese manufacturers currently supply approximately two-thirds of the world's data center optical modules and control around 70% of global indium supply along with key InP material production capacity. Additionally, leading companies have already completed overseas production capacity arrangements. Historical trade frictions have not altered the trend of Chinese manufacturers continuously increasing their global market share, and the US is unlikely to achieve supply chain substitution in the short term.