Hong Kong's stock market started June on a positive note, with all three major indices closing higher. The Hang Seng Tech Index saw gains exceeding 2.5% during the session. At the close, the Hang Seng Index rose 0.86% or 215.79 points to 25,398.18, with a total turnover of HKD 330.937 billion. The Hang Seng China Enterprises Index gained 0.97% to 8,507.87, and the Hang Seng Tech Index advanced 1.65% to 4,964.92.

Analysis suggests the macro narrative may shift from "AI-driven low-inflation growth" to "structural adjustments amid reflation" in the second half of the year. The Hong Kong market is seen as having a foundation for further gains, supported by the onset of a global reflation cycle, corporate earnings recovery, the AI industry narrative, and domestic substitution catalysts, which could drive the Hang Seng and Hang Seng Tech indices higher.

**Blue-Chip Performers**

Lao Pu Gold (06181) led the blue-chip gainers. Its share price closed up 7.74% at HKD 543, with a turnover of HKD 1.288 billion, contributing 3.9 points to the Hang Seng Index. The company recently opened a new store in Macau's Parisian Shopping Centre, its third outlet in Macau following its Venetian store. The company plans to optimize its domestic store network and enhance cultural spaces and customer experience in 2026, while also actively expanding into Asian markets like South Korea, Malaysia, Thailand, and Japan, as well as other overseas markets targeting both Chinese and non-Chinese customers.

Among other blue-chips, Meituan-W (03690) rose 6.54% to HKD 78.25, contributing 41.96 index points. Orient Overseas (International) Ltd (00316) gained 5.88% to HKD 144.1, adding 1.63 points. On the downside, Innovent Biologics (01801) fell 2.94% to HKD 80.9, dragging the index down by 6.44 points. Semiconductor Manufacturing International Corporation (00981) declined 2.63% to HKD 79.45, weighing on the index by 14.33 points.

**Sector Highlights**

Most major technology stocks strengthened, with Meituan rising over 6% ahead of its earnings, Tencent up over 2%, and Alibaba gaining over 1%. The strong performance and guidance from U.S. software companies like Snowflake, MongoDB, and Okta have challenged the "AI cannibalization" narrative, leading to a broad rally in SaaS concept stocks. KINGDEE INT'L (00268) surged over 19%. Coal stocks advanced as supply tightness may exceed market expectations. Several automakers reported May delivery figures, boosting most auto stocks. New consumption concepts like tea beverages and beauty/personal care remained strong. Macau gaming stocks rose in the afternoon following a 6.7% year-on-year increase in May gross gaming revenue. Home appliance and domestic property stocks were also active. Conversely, PCB concept and semiconductor stocks, representing AI hardware, were among the top decliners.

**Top Gaining Sectors**

1. SaaS Concept Stocks

KINGDEE INT'L (00268) closed up 19.39% at HKD 8.68.

ChinaSoft International (00354) rose 12.70% to HKD 4.17.

Maifushi (02556) gained 12.56% to HKD 40.34.

Weimob (02013) advanced 7.94% to HKD 1.36.

Extremely pessimistic expectations driven by the "AI cannibalization" narrative had previously caused a 30% pullback in the software index IGV in Q1 2026. Last week, strong results and guidance from AI infrastructure companies like Snowflake, MongoDB, and Okta, with Snowflake's stock surging 48.4% weekly, led the IGV index to gain 8% for the week. Analysis notes that May saw software companies like Snowflake, MongoDB, and Salesforce all report better-than-expected results, leading the market to reassess the benefits for software firms in the AI era. The software sector experienced a strong rebound, with the IGV index rising over 21% for the month, its best monthly performance since October 2001, as earnings disproved the cannibalization narrative and unleashed valuation repair potential.

2. Coal Stocks

CHINA COAL (01898) closed up 7.12% at HKD 13.54.

Yankuang Energy (01171) gained 6.80% to HKD 15.55.

Shougang Resources (00639) rose 5.88% to HKD 2.88.

China Shenhua Energy (01088) advanced 4.79% to HKD 47.24.

Analysis suggests that mine accidents combined with the traditional June safety and environmental inspection period may lead to supply tightness lasting longer than the market expects. On the demand side, power plant daily consumption has risen sequentially and is significantly higher year-on-year due to the subtropical high, with expectations of hot weather gradually materializing. If this persists, it will continue to stimulate power plant inventory replenishment, supporting coal prices. Following a serious mine accident in Shanxi last week, safety inspections are ongoing, and short-term production halts and maintenance may expand, directly suppressing effective supply release in the region. Additionally, as temperatures rise, peak season demand for coal is expected to gradually start. High uncertainty in the U.S.-Iran conflict corresponds to high volatility, but oil prices are unlikely to drop significantly in the short term.

3. Automobile Stocks

LEAPMOTOR (09863) closed up 8.30% at HKD 42.56.

NIO Inc. (09866) gained 6.68% to HKD 45.34.

XPeng Inc. (09868) rose 6.19% to HKD 67.8.

Several automakers reported May delivery data. LEAPMOTOR delivered 81,569 new vehicles in May, up 81% year-on-year, setting a new monthly record. NIO delivered 37,705 vehicles in May, up 62.3% year-on-year and 28.4% month-on-month. Zeekr delivered 34,377 vehicles in May, up 81.8% year-on-year, marking four consecutive months of year-on-year and month-on-month growth. XPeng delivered 32,158 vehicles in May, up 4% month-on-month. Xiaomi's auto deliveries again exceeded 30,000 units in May.

4. Gaming Stocks

Wynn Macau (01128) closed up 4.29% at HKD 5.66.

Sands China (01928) gained 3.72% to HKD 15.9.

Hui Cai Holdings (01180) rose 2.94% to HKD 0.7.

Galaxy Entertainment (00027) advanced 2.11% to HKD 31.98.

Macau's Gaming Inspection and Coordination Bureau reported May gross gaming revenue of MOP 22.611 billion, up 6.7% year-on-year. January-May gross gaming revenue totaled MOP 108.379 billion, up 10.9% year-on-year. Analysis points out that the industry's EBITDA margin (based on total revenue) slightly increased from 23.08% in Q4 last year to 23.43% in Q1 this year. It is believed that the peak of highly competitive reinvestment in the industry has passed, and industry margins are expected to recover over the next few quarters.

**Notable Movers**

MEITU (01357) saw a significant climb, closing up 26.15% at HKD 5.5. A report indicated that the total overseas revenue of MEITU's apps grew 42% year-on-year in April 2026, with several products showing strong overseas growth, including Wink, whose overseas revenue nearly doubled in April. While MEITU's apps also saw significant revenue growth in mainland China in April, growth in overseas markets was even more robust.

HUAQIN (03296) remained strong throughout the day, closing up 19.05% at HKD 93.75. NVIDIA's announcement of entering the PC processor market at the GTC Taipei 2026 conference ignited the AI PC concept. Analysis previously noted HUAQIN as a global leader in smart hardware platforms and a core beneficiary of the AI computing wave, with a resilient consumer electronics base and market share expansion driven by rising ODM penetration across multiple product categories.

Lens Technology (06613) moved higher in the afternoon, closing up 13.37% at HKD 27.3. The company announced a draft 2026 A-share restricted stock incentive plan, with a grant price set at RMB 20.36 per share, a discount of approximately 49.7% to the latest closing price of RMB 40.5. Analysis noted that the company's 2026 revenue target is 18% and 10% above their and market expectations, respectively, while its 2027 and 2028 revenue targets are below their expectations.

LENOVO GROUP (00992) hit a new high, closing up 5.17% at HKD 25.24. Dell Technologies' recent record-breaking Q1 FY2027 results have fueled overall optimism for AI infrastructure-related companies. LENOVO GROUP's AI transformation results are also fully materializing, with full-year FY2025/2026 AI-related revenue growing 105% year-on-year, accounting for 33% of total revenue. AI revenue growth remained high at 84% in Q4, with quarterly net profit doubling year-on-year, and its core AI Infrastructure Solutions Group (ISG) business successfully reaching an inflection point towards profitability.