Hong Kong's three major indices closed slightly lower today, with heavyweight technology stocks weakening and structural divergence across the board standing out, while mainland property and biopharmaceutical sectors bucked the trend to post gains, and non-ferrous metals and automotive sectors continued to pull back.

At the close, the Hang Seng Index fell 0.48% to 24,523.57 points, with total daily turnover of HK$184.63 billion; the Hang Seng Tech Index dropped 1.08% to 4,249.62 points.

Among Hong Kong ETFs ranked by size, Tracker Fund of Hong Kong (02800) closed down 0.63% at HK$25.14; CSOP Hang Seng Tech Index ETF (03033) closed down 1.24% at HK$4.152; and CSOP SK Hynix Daily Leveraged (2x) Product (07709) closed up 1.21% at HK$40.

Sector Performance

The State Council executive meeting released incremental policy signals to stabilize the property market, and combined with the official implementation of Shanghai's new housing policy, the real estate sector rose against the trend, triggering a wave of daily limit-up moves, with related ETFs leading the gains.

At the close, Real Estate ETF Huabao (159707.SZ) rose 6.53% to 0.538 yuan; Real Estate ETF Yinhua (159768.SZ) gained 6.40% to 0.482 yuan; and Real Estate ETF ChinaAMC (515060.SH) advanced 4.52% to 0.624 yuan.

On the news front, the State Council executive meeting was held on September 28 to study and introduce policies on stabilizing the real estate market and promoting employment and income growth, and proposed launching a batch of pragmatic and effective incremental policies; on the same day, Shanghai's new housing policy was implemented, with four departments jointly issuing implementation opinions covering strengthening pre-sale management, implementing completed-home sales, promoting the main bank system, increasing financing support, and optimizing land supply, providing execution guidelines for first-tier cities.

China Securities Co. noted that the "August 28" housing policy reshapes the fundamental system of real estate, and city-level and corporate-level divergence in property development will continue, maintaining a positive outlook on quality companies.

Founder Securities noted that the A-share real estate sector shows a clear recovery trend, with second-hand home transactions in 20 key cities continuing to improve year-on-year and maintaining double-digit growth for four consecutive weeks.

Three major outbound licensing deals were concentrated in landing, combined with continuous delivery of hard clinical data for domestic innovative drugs, the innovative drug sector collectively rebounded, with related ETFs broadly gaining.

At the close, Innovative Drug ETF Yinhua (159567.SZ) rose 3.07% to 0.704 yuan; Hang Seng Innovative Drug ETF Huatai-PineBridge (520500.SH) gained 3.01% to 1.402 yuan; and Hong Kong Stock Connect Innovative Drug ETF China Universal (159570.SZ) advanced 2.76% to 1.452 yuan.

On the news front, three major licensing deals were concentrated on September 29, covering frontier directions such as oral weight loss, RAS, and bispecific antibodies, each with a deal size exceeding US$2 billion: Hengrui Medicine licensed the global rights outside Greater China for an investigational once-weekly oral GLP-1/GIP dual receptor agonist to a multinational pharmaceutical company, with a potential total deal value of up to US$2.6 billion and an upfront payment of US$300 million; AstraZeneca made a US$2 billion strategic investment in Summit to advance clinical research on Akeso's ivonescimab combination therapy; and the night before, Shanghai Sipuru Pharmaceutical's preclinical oral KRAS G12D inhibitor received a global exclusive license from a multinational pharmaceutical company, with an upfront payment of US$400 million, setting a global record for upfront payments on preclinical asset outbound licensing.

Industrial Securities believes that "innovation plus internationalization" remains the core theme for pharmaceuticals in 2026.

Kaiyuan Securities analyzed that China's innovative drug industry is entering a new stage driven by revenue growth, profit realization, and R&D innovation in coordination, with 39 Chinese biotech listed companies reporting combined revenue growth of 33.81% year-on-year in the first half of 2026, and net profit attributable to parent turning positive at 8.119 billion yuan.

Institutional Views

Huatai Securities believes that after a short-term rebound last week, the market has almost returned to levels before the September FOMC meeting.

In this brief rebound, the difference in resilience between US and Hong Kong stocks stems mainly from the strength of liquidity gaps and fundamental support.

Currently, Hong Kong stocks face liquidity pressure from foreign capital outflows and a relatively high scale of lock-up expirations; last Friday, with Stock Connect not yet open, market turnover once fell back to HK$100 billion, about 60% of the prior 20-day average, comparable to the contraction seen during this year's Spring Festival and Labor Day holidays when southbound trading was closed (59%-63%), and short-term liquidity may remain tight.

On fundamentals, structural data such as services consumption during the long holiday is worth close attention, but overall it may be difficult to change the relatively subdued trend in earnings data.

In terms of sector allocation, dividend plays remain the base position, controlling exposure to banks and coal where the dividend yield advantage has narrowed relative to A-shares and where raising payout ratios is difficult, while focusing on higher cost-performance directions such as oil and gas.

Innovative drug and CXO leaders have already recovered in the trade following the US rate hike, and can continue to be held, though beta elasticity is limited, requiring careful stock selection and profit-taking discipline; essential consumer staples such as beverages and dairy are already on the right side of the fundamental bottom but lack catalysts, so patience is warranted.

ETF Developments

Hong Kong Stock Connect Dividend Low Volatility ETF GF (158039.SZ) listed on its first day, closing down 1.39% at 0.996 yuan, with turnover of 98.2589 million yuan; the fund tracks the S&P Hong Kong Stock Connect Low Volatility Dividend Index, covering "high dividend plus low volatility" sectors under Stock Connect, such as financials (banks/insurance), energy, utilities, telecommunications, and real estate construction.