Hong Kong stocks ended lower on Tuesday as three major indices struggled, pressured by rebounding oil prices amid Iran's tough stance and unexpectedly strong U.S. PMI data that triggered a fresh round of heavy selling in U.S. Treasuries.

At the close, the Hang Seng Index fell 0.29% or 72.99 points to 24,761.13, with total turnover of HK$159.552 billion. The Hang Seng China Enterprises Index slipped 0.09% to 8,266.01, while the Hang Seng Tech Index dropped 0.41% to 4,361.13.

Hua Tai Securities chief macro economist Yi Huan commented that global central banks have not changed their direction of monetary tightening, which will constrain Hong Kong stock valuations. She suggested that balanced allocation needs to go further from the sector level down to the structural level, with dividend assets remaining the base position, and recommended increasing exposure to oil, petrochemicals and gas for better value. Innovative drug and CXO leaders can continue to be held, but sector beta elasticity is limited, requiring careful stock selection and profit-taking conditions.

Among blue chips, PetroChina (00857) was active against the trend, closing up 2.83% at HK$9.615 with turnover of HK$682 million. Middle East tensions continued as Brent crude settlement price reclaimed US$103, ending a five-day losing streak. Iranian President Masoud Pezeshkian said in his UN General Assembly speech that Iran would not allow ships to freely pass through the Strait of Hormuz while still under sanctions.

Other blue chips saw CNOOC (00883) rise 2.14% to HK$23.84, ICBC (01398) gain 1.59% to HK$7.66, while China Molybdenum (03993) fell 3.70% to HK$15.08 and Hua Hong Semiconductor (01347) dropped 3.33% to HK$110.4.

In hot sectors, tech stocks were mixed, with Xiaomi rising 1.53% against the trend after its product launch, while Tencent fell 0.59%. The three major oil companies rose collectively amid ongoing Middle East tensions; select robotics concept stocks strengthened, with Kailesi Technology up nearly 9%. On the other side, storage and semiconductor tech stocks faced pressure; stronger-than-expected PMI data boosted rate hike expectations, causing gold and non-ferrous metal stocks to decline broadly; biopharmaceutical stocks, lithium battery shares and mainland property stocks all weakened.

The "three barrels of oil" rose collectively. At the close, PetroChina (00857) gained 2.83% to HK$9.615, CNOOC (00883) rose 2.14% to HK$23.84, and Sinopec (00386) added 0.90% to HK$4.485. Iranian President Masoud Pezeshkian stated in his UN General Assembly speech that Iran would not allow ships to freely transit the Strait of Hormuz while under sanctions. Bank of America strategists forecast Brent crude to average around US$80 per barrel in 2027, but noted challenges from declining strategic reserves and near-term severe shortages. The bank said if the Iran conflict drags on and continues depleting inventories, oil prices could climb above US$150 per barrel.

Storage chip and semiconductor stocks came under pressure. At the close, GigaDevice (03986) fell 5.12% to HK$489.6, Hua Hong Semiconductor (01347) dropped 3.33% to HK$110.4, Yangtze Optical Fibre and Cable (06869) declined 4.34% to HK$187.2, and Cambridge Technology (06166) fell 4.31% to HK$117.8. Overnight U.S. storage and tech stocks declined amid hawkish signals and Treasury selling. Notably, "Big Short" investor Michael Burry said he increased his short position on Micron Technology, emphasizing the move was "quite large" and warning that a cycle reversal would trigger "violent selling." Additionally, Acer CEO Jason Chen recently warned that increased storage chip production in mainland China could eventually ease supply constraints and pressure prices, with effects becoming more apparent around end-2027, providing new support for Burry's bearish view on storage stocks.

Gold and non-ferrous metal stocks declined broadly. At the close, Lingbao Gold (03330) fell 4.55% to HK$21, Shandong Gold (01787) dropped 3.27% to HK$20.72, and Zijin Mining (02899) declined 2.56% to HK$32.72. The U.S. dollar index rose to 101, an 8-week high. Additionally, driven by rebounding international oil prices and unexpectedly strong U.S. PMI data, U.S. Treasuries faced a fresh round of heavy selling. Five-year Treasury yields broke above 5% for the first time since 2007, while ten-year yields surpassed the 5.1% mark. Notably, Federal Reserve Governor Barr said further rate hikes may be needed to ensure inflation returns to target, continuing to release hawkish signals. CITIC Futures believes gold will remain range-bound and weak in the short term, requiring a slowdown in dollar gains or cooling of tightening expectations for recovery.

Mainland property stocks pulled back. At the close, China Overseas Grand Oceans (00081) fell 2.62% to HK$2.785, and China Resources Land (01109) dropped 1.89% to HK$29.06. According to reports, market rumors suggested a nationwide interest subsidy policy would be implemented, with the Ministry of Finance subsidizing 20-50BP and local governments subsidizing 20-50BP, bringing total subsidy intensity up to 100BP to push first-home mortgage rates down to 2%. Rumors also suggested mortgage subsidies would land soon with a total quota of 100 billion yuan and 20BP subsidy for first homes. However, multiple brokerage real estate analysts believe the likelihood of a nationwide subsidy policy is low, with one analyst saying "at the national level, extending loan terms is actually similar to the interest reduction from subsidies or rate cuts."

Among notable movers, Dmall (02586) climbed again, closing up 15.62% at HK$7.515. Dmall has integrated into the Doubao ecosystem and recently launched "Dmall Flash Purchase," which has completed internal testing. The product combines the company's retail digitalization expertise in offline stores and goods fulfillment with Doubao's AI interaction capabilities to create a new traffic entry point for physical retail. In June this year, Dmall announced full integration into WeChat's AI agent ecosystem.

Tuhu-W (09690) surged, closing up 11.31% at HK$11.42. Tuhu announced that its indirectly wholly-owned subsidiary entered into an agreement before the September 24 trading session to conditionally acquire all equity of Conti Trade Australia, an Australian company under German tire manufacturer Continental AG. The target company operates the "mycar Tyre & Auto" automotive service network with 279 stores in Australia as of end-June this year.

Epiworld (02726) performed strongly, closing up 8.06% at HK$89.15. Zhongtai International initiated coverage with a "Buy" rating based on 22x 2027 expected price-to-sales valuation, with a target price of HK$166.30. The firm noted the company is the world's largest silicon carbide epitaxy supplier with 31.6% global market share in 2024, and the first globally to achieve commercial supply of 8-inch silicon carbide epitaxy, with customers covering 4 of the world's top 5 silicon carbide device manufacturers.

Joyson Electronics (00699) rose modestly, closing up 3.69% at HK$12.65. According to reports, industry chain sources in Ningbo confirmed that Tesla's related team has inspected the robotics business of Joyson Electronics and other Ningbo-listed companies, many of which have had years of cooperation with Tesla on new energy vehicle components and are expected to supply robot components for Tesla's mass-produced humanoid robot Optimus.

InnoCare Pharma (09969) spiked in the afternoon before diving, closing down 7.87% at HK$14.51. InnoCare announced at midday that its wholly-owned subsidiary signed a research collaboration and licensing agreement with Eli Lilly, with the two parties conducting strategic cooperation in innovative drug R&D to discover and develop up to 5 innovative target projects. Eli Lilly will pay up to US$100 million in upfront and near-term milestone payments, with total potential R&D and commercialization milestone payments of approximately US$3.25 billion.

CATL (03750) continued to face pressure, closing down 3.66% at HK$492.8. Citi released a research report stating that concerns about 2027 battery demand have led to recent selling of CATL and lithium carbonate-related stocks. The bank believes the market has priced in weak expectations and somewhat overreacted. Based on valuation attractiveness, it favors CATL's A-shares and second-tier players gaining market share.