The three major Hong Kong stock indices all closed in the red today, with the Hang Seng Tech Index falling over 3%. Expectations for a marginal easing of the Federal Reserve's interest rate hikes, combined with sustained gold purchases by global central banks providing medium- to long-term foundational support, led to strong gains for gold-related ETFs. A significant overnight rebound in international crude oil prices resulted in a notable performance for oil and gas-related ETFs. At the close, the Hang Seng Index fell 0.95% to 24,892.66 points, with a total daily turnover of HK$312.763 billion; the Hang Seng Tech Index dropped 3.04% to 4,668.23 points. Among major Hong Kong-listed ETFs by size, Tracker Fund of Hong Kong (02800) closed down 1.02% at HK$25.34; CSOP Hang Seng Tech Index ETF (03033) closed down 3.01% at HK$4.58; and CSOP 2x Long Samsung China SSE 50 China A Index Daily (-1x) Inverse ETF (07709) closed down 3.53% at HK$55.76.

Sector Performance Overview

1. Gold-related ETFs showed resilience and strength against the broader market downtrend, supported by marginally easing expectations for Federal Reserve rate hikes and continued gold buying by global central banks providing underlying medium- to long-term support. At the close, Guotai Gold ETF (517400.SH) rose 6.31% to 1.466 yuan; Yongying Gold Equity ETF (517520.SH) gained 5.7% to 1.854 yuan; and ChinaAMC Gold Equity ETF (159562.SZ) increased 5.51% to 2.01 yuan. Analysis from China Post Securities suggests that while recent U.S. CPI data came in lower than expected, the Middle East situation adds inflationary risks. The precious metals market awaited the CPI data this week; although it fell more than expected, hawkish comments from House representatives like Warsh were noted. Concurrently, Middle East risks are accumulating, with U.S. attacks on Iranian water and power plants escalating the conflict. The Strait of Hormuz is now closed, and after Iran's strikes on tankers, crude oil supply risks are rising rapidly. Currently, the 2-year U.S. Treasury yield remains above 4%, recovering some of its post-CPI decline, with a probability of a 50 basis point rate hike within the year. Overall, the most pessimistic period for gold is likely over, and allocation funds remain firm. CITIC Futures pointed out that gold stabilized and rebounded near the key psychological $4,000 level, driven by bargain-hunting. The market continues to weigh the transmission of Middle East conflicts to energy prices and shifts in Fed rate hike expectations. On the fund flow front, gold ETFs overall are still in a net reduction trend, with total holdings at a cyclical low, but top products are diverging. Speculative net long positions have rebounded somewhat, indicating a marginal easing of market pessimism. Additionally, central bank gold buying demand remains robust, providing solid bottom support for prices.

2. Ongoing market concerns over potential disruptions to global core crude oil shipping routes, coupled with a sharp overnight rebound in international oil prices, led to a standout performance for oil and gas-related ETFs. At the close, F Samsung Crude Oil Futures ETF (03175) surged 3.96% to HK$10.38; Harvest S&P Oil & Gas Exploration & Production Select Industry ETF (159518.SZ) jumped 4.08% to 1.199 yuan; and Fullgoal S&P Oil & Gas Exploration & Production Select Industry ETF (513350.SH) advanced 3.72% to 1.282 yuan. Affected by the ongoing U.S.-Iran conflict, international oil prices surged significantly recently, with London Brent crude futures briefly breaking through the $91 per barrel mark to hit a new high since mid-June. Media reports cited by Xinhua state that the Yemeni Houthi group recently announced an immediate "maritime embargo" on Saudi Arabia. The Saudi-led coalition subsequently stated it has taken measures to protect member states' ships for safe passage through the Bab el-Mandeb Strait and will firmly respond to any Houthi threats. Public opinion suggests last week's attack on Sana'a International Airport was the "trigger" for the Houthi announcement. Analyst Ling Chuanhui from Nanhua Futures believes the U.S.-Iran geopolitical game remains the core theme for current oil price pricing. Deep-seated differences between the two sides in three key areas—strait control, asset unfreezing, and nuclear issues—make negotiations difficult to advance, and bilateral friction may recur. Following the Houthi announcement of a maritime blockade against Saudi Arabia, subsequent focus should be on the actual navigation status of the Bab el-Mandeb Strait. Secondly, the continued U.S.-Iran standoff has again reduced shipping traffic through the Strait of Hormuz, further tightening the fundamental supply-demand balance for crude oil.

Institutional Perspectives

China Merchants Securities' strategy team notes that the portfolio adjustment path of active equity-focused funds in 2026Q2 shows an extremely distinct K-shaped divergence. The upward branch of the K-shape represents active funds accelerating their clustering around AI computing infrastructure. The downward branch represents active funds indiscriminately reducing positions in old growth sectors. Behind this extreme K-shaped divergence is, on one hand, a reflection of a K-shaped divergence in fundamentals; on the other hand, in an environment of limited incremental funds, capital is actively embracing the AI theme, creating significant diversion from other sectors. While this structure strengthens the market's main trend in the short term, it also leads to rising trading concentration and increased fragility. China Securities Co., Ltd. (CSC) states that the recent rotation in the Hong Kong market has short-term fundamental support (declining U.S. bond yields + domestic policy catalysts), but last Friday's broad-based plunge warns that the spillover effects of AI deleveraging are amplifying. Subsequent attention should focus on two verification windows: first, the July FOMC meeting, monitoring whether the logic of a receding Fed rate hike cycle can strengthen further, providing sustained support for the denominator (discount rate) of Hong Kong stocks; second, the wave of share unlockings for Hong Kong-listed tech and internet companies starting in late July and the Q2 earnings season, focusing on whether a profit inflection point emerges for internet platforms and whether the monetization logic of AI applications can be validated.

ETF Developments

1. Newly listed Huatai-PineBridge CSI All Share Dividend Quality ETF (561630.SH) debuted, closing up 0.2% at 1.014 yuan with a turnover of 123 million yuan. The fund tracks the CSI All Share Dividend Quality Index, whose constituents span sectors including consumer, non-ferrous metals, media, computers, energy, and healthcare, blending cyclical and growth attributes.

2. Newly listed Penghua CSI Rare Metal Theme ETF (561250.SH) debuted, closing up 1.26% at 0.968 yuan with a turnover of 34.3962 million yuan. The fund tracks the CSI Rare Metal Theme Index, focusing on upstream resources for new energy and strategic minor metals.