Hong Kong's stock market advanced in a choppy session on Friday, with all three major indices rising more than 1% at their intraday highs.

The Hang Seng Index closed up 1.14% or 266.29 points at 23,616.32, with a total turnover of HK$314.72 billion. The Hang Seng China Enterprises Index gained 1.46% to 7,812.35, and the Hang Seng Tech Index rose 0.94% to 4,541.23.

Guosen Securities noted that global marginal liquidity tightened somewhat in June, and with the U.S. dollar index breaking higher, Hong Kong's market liquidity has been relatively weak. The firm believes the AI sector offers the strongest earnings certainty, and also suggests the market may have overextended its expectations for Federal Reserve rate hikes. As non-farm payrolls cool and inflation gradually declines, commodities may also present valuation repair opportunities.

TENCENT (00700) was a standout performer among blue-chips, closing up 4.82% at HK$452 with a turnover of HK$18.52 billion, contributing 89.98 points to the Hang Seng Index. The company officially launched its Hunyuan Hy3 model today, which demonstrates intelligence levels significantly stronger than models of similar size and comparable to flagship models with 2-5 times the parameters, while pricing has been further reduced, greatly improving overall stability and cost-effectiveness.

JP Morgan noted that as TENCENT began beta testing its WeChat AI Agent in June, confidence in the company's previously conceptual framework has significantly increased.

Among other blue-chips, Kuaishou-W (01024) surged 7.98% to HK$46, contributing 15.84 index points. China Biotic Products (01177) rose 6.54% to HK$5.05, adding 4.89 points. On the downside, BYD Electronic (00285) fell 4.13% to HK$21.34, dragging the index down by 1.16 points, and WH Group (00288) dropped 3.63% to HK$8.50, weighing on the index by 4.07 points.

Market Sector Performance

Major technology stocks mostly gained, with Kuaishou surging nearly 8% following the independent commercialization of its Kling AI, while TENCENT rose nearly 5% and Meituan advanced over 4%.

Innovative drug concepts continued their strong performance after the sector received another significant supportive policy boost. Power equipment stocks performed well amid reports of worsening electricity shortages in the U.S. due to a heatwave. The three major Chinese airlines were active throughout the session as oil prices retreated and the summer travel season commenced. Coal stocks, insurance stocks, and pork-related concepts also generally trended higher.

Conversely, AI hardware stocks such as PCB and optical communication firms plunged after an institution reported potential delays for Nvidia's Kyber rack.

1. Innovative Drug Concepts Strengthen Again

INNOCARE (09969) closed up 6.96% at HK$13.99. Connexion Therapeutics-B (02162) gained 6.76% to HK$86.85. China Biotic Products (01177) rose 6.54% to HK$5.05.

On July 3, the National Medical Products Administration issued a draft announcement soliciting public opinion on optimizing the review and approval process for cell and gene therapy products. The draft proposes supporting the research and development of clinically valuable cell and gene therapy drugs and including eligible products in the 30-day fast-track for innovative drug clinical trial approvals, injecting policy support into the industry.

Separately, data from Pharma Intelligence shows the total value of China's pharmaceutical outbound licensing deals in the first half of 2026 reached $99.7 billion, 1.9 times the full-year 2024 figure of $52.2 billion and close to 73% of the full-year 2025 total of $135.7 billion.

2. Power Equipment Stocks Shine

Weisheng Holdings (03393) surged 10.85% to HK$21.86. Dongfang Electric (01072) rose 6.65% to HK$24.04. Harbin Electric (01133) gained 6.39% to HK$16.49. Weichai Power (02338) advanced 5.58% to HK$37.48.

Reports indicate that PJM Interconnection LLC, the largest grid operator in the U.S., activated a Stage 2 Energy Emergency Alert on Friday. Facing triple pressures from sustained high temperatures, widespread generator failures, and severely overloaded transmission lines, the organization has escalated emergency measures to prevent widespread blackouts.

Furthermore, according to a Siemens Energy announcement, Siemens expects average annual demand for gas turbines in the coming years to be 110-120GW, an upward revision of 20GW from its previous guidance of 90-100GW. The company's order backlog stood at 60GW at the end of Q2 2026 and is projected to reach 90-100GW by the end of fiscal year 2026. Regarding capacity expansion, the capital expenditure guidance for FY26 is €2.2 billion. With only €0.7 billion spent in the first half, capital expenditure in the second half is expected to increase significantly.

3. Pork-Related Concepts Rise Broadly

DEKON AGR (02419) closed up 5.98% at HK$50.30. Zhongliang Jiakang (01610) gained 4.90% to HK$1.07. Muyuan Foods (02714) rose 3.80% to HK$32.82.

Entering July, hog prices have seen a significant rebound. According to Zhuhaoduo data monitoring, the national average price for ternary hogs on July 5, 2026, was 10.62 yuan/kg, representing a weekly increase of 12.74%. Nationwide, prices in many regions have stabilized above 10 yuan/kg, with local quotes in consumption areas of South and East China even exceeding 11 yuan/kg.

Shenwan Hongyuan pointed out that signals of accelerated industry consolidation are emerging, and policy guidance for capacity regulation is gradually intensifying. Upward cyclical momentum is currently accumulating, and accelerated capacity reduction going forward will be a key catalyst for market performance.

4. AI Hardware Stocks Including PCB and Optical Communication Plunge

Yangtze Optical Fibre and Cable (06869) plummeted 14.76% to HK$171.50. KB LAMINATES (01888) tumbled 12.55% to HK$73.85. Shenghong Technology (02476) fell 8.42% to HK$272.00.

On the morning of July 6, semiconductor industry research firm SemiAnalysis published six consecutive posts on platform X (formerly Twitter), disclosing that Nvidia's Kyber NVL144 rack architecture is facing significant delays and multiple cancellations. SemiAnalysis stated bluntly: "Major Delay: Just three months after Nvidia CEO Jensen Huang showcased Kyber NVL144 at GTC, the product has suffered a major setback, delayed by over 12 months, pushing it to 2028." The institution attributed the product delay to "significant challenges remaining in the manufacturing process of PCB midplanes."

Notable Movers

Deshi-B (02526) surged on heavy volume, closing up 28.71% at HK$399.00. On July 4, Deshi officially launched its latest product, the iMedLoop global medical imaging data platform. This launch focused on medical imaging data, foundational medical imaging models, specialized disease AI applications, clinical collaboration, and industry ecosystems, marking a further step for Deshi in advancing the platformization, scaling, and ecosystem development of medical imaging AI.

H&H INTL HLDG (01112) issued a positive profit alert, closing up 18.90% at HK$13.46. The company announced that, benefiting from a significant increase in adjusted comparable EBITDA, optimized debt structure, and lower overall financing costs, it expects adjusted comparable net profit for the six months ending June 30, 2026, to increase by over 100% compared to the same period last year.

TCL Electronics (01070) rose throughout the session, closing up 11.87% at HK$14.99. Following the release of its Q1 2026 results, Zhongtai Securities noted that TCL Electronics' Q1 2026 revenue was HK$29.2 billion, up 15% year-on-year, while adjusted profit was HK$384 million, surging 140% year-on-year. In overseas markets, the company's sales value, sales volume, and retail average selling price increased by 23%, 17%, and 5% year-on-year respectively, with gross profit per unit reaching HK$343, a 35% year-on-year increase.

Maoyan Entertainment (01896) rallied in the afternoon session, closing up 8.87% at HK$5.03. On July 6, the official poster for Stephen Chow's latest comedy film "Kung Fu Women's Soccer" was released, officially setting its premiere date for July 11. Maoyan Entertainment is one of the production companies. CICC recently noted that with films being scheduled densely recently, the visibility of the 2026 summer box office (June 1 to August 31) lineup is increasing.

Leapmotor (09863) extended its gains, closing up 6.69% at HK$39.22. The Leapmotor B10 completed local certification in Mexico, officially entering the local market and commencing deliveries, marking the start of its expansion into the North American market. Notably, as of June 2026, Leapmotor's global cumulative deliveries have surpassed 1.5 million vehicles, taking only 8 months to go from 1 million to 1.5 million units. June single-month deliveries reached 93,376 vehicles, continuing to set new records.