Hong Kong's major equity indices all closed the morning session in negative territory.

The Hang Seng Index was down 0.83% at 24,923.77 points by the midday break, while the Hang Seng Tech Index fell 2.11%. The Hang Seng China Enterprises Index declined 1.13%.

Sector Performance Overview

Technology and internet stocks were broadly lower. NetEase shares dropped more than 6%, and Tencent fell over 5%. Bilibili and Kuaishou both saw losses exceeding 4%.

Gold-related stocks posted significant gains, with Lingbao Gold surging more than 16%.

Chipmakers were among the top gainers, with ZTE advancing over 10%.

Automotive stocks weakened, with Leapmotor declining more than 5%.

AI application stocks were among the worst performers, with MiniMax down 8%.

Gold Stocks Rally

The surge in gold stocks was directly fueled by a continued rally in the price of gold. During the morning session, the bullion price broke through several key resistance levels, moving past $4,090, $4,100, $4,110, and $4,120 per ounce. Analysis notes that bargain-hunting has driven this phase of the rebound, with the $4,000 level demonstrating strong support. It is emphasized that gold stocks, acting as a leveraged play on the gold price, offer higher earnings sensitivity and growth potential, often delivering outsized returns during periods of rising gold prices.

Chipmakers Lead Gains

The strength in chip stocks comes as the 2026 World Artificial Intelligence Conference (WAIC) is being held in Shanghai. At the event, ZTE's sub-brand Nubia officially unveiled what it claims is the world's first AI agent smartphone, the "Nubia NaviX Ultra." Company representatives described the device as the world's first smartphone with deeply embedded AI, featuring a more deeply integrated version of ByteDance's Doubao AI assistant within its operating system.

Automotive Sector Weakness

Regarding the softer performance of auto stocks, a recent report suggests the domestic automotive market will see a mild recovery in the second half of the year, with a shift from a pattern of "weak domestic demand, strong exports" to one of "stable domestic demand, strong exports" by 2027. It notes that pessimistic expectations regarding demand being pulled forward this year are already reflected in prices, presenting what is viewed as an optimal two-year entry point.

AI Application Stocks Under Pressure

The decline in AI application stocks follows a report which adjusted the long-term valuation framework for companies including MiniMax. The target price for one entity was revised down, with the change attributed entirely to a reset of valuation multiples rather than a more pessimistic view on commercial prospects. The report's stance is described as waiting for clearer evidence of a return to the leading edge before making further judgments.