Hong Kong stocks saw all three major indices decline at midday trading on September 2, with the benchmark Hang Seng Index dropping 0.96% to 25,087.22 points. The Hang Seng Tech Index fell by 1.54%, while the Hang Seng China Enterprises Index slipped 1.11%.
In terms of sector performance, internet stocks showed widespread weakness, with Bilibili plunging over 3%, while heavyweights like Kuaishou, Baidu, and NetEase each dropped more than 2%. Bucking the downtrend, Xiaomi managed to gain over 1%.
Auto stocks were among the biggest laggards, led by NIO, which skidded more than 5%. This came as China's Ministry of Commerce, along with the Ministry of Industry and Information Technology and the State Administration for Market Regulation, recently issued new guidelines for overseas competition and compliance practices among automakers. The guidelines mandate that pricing for foreign markets should be based on production costs and international market conditions, while discouraging frequent or sharp price fluctuations that could harm overseas consumer interests and brand reputation.
Gold-related equities also took a hit, with Mount Everest Gold falling over 5%. The precious metal itself came under severe pressure from global bond selling, a stronger US dollar, and a sharp rally in oil prices. Gold futures breached the $4,300 per ounce mark this morning, representing a drop of more than 8% from its recent high near $4,700 last week. Ongoing geopolitical tensions continue to stoke inflation expectations, as the US launched a fresh round of airstrikes on targets inside Iran on Tuesday, prompting retaliatory strikes from Tehran, marking the second outbreak of hostilities between the two nations within just three days.
Chinese brokerage stocks were among the worst performers, with CICC tumbling more than 6%. This comes as the sector concluded its 2026 interim reporting season, with 43 listed securities firms posting combined operating revenue of 364.71 billion yuan, a year-on-year increase of 44.8%. Their aggregate net profit attributable to shareholders reached 155.37 billion yuan, surging nearly 50% compared to the same period last year. Notably, 39 of these brokers reported simultaneous growth in both revenue and profit, with several institutions setting new records for the corresponding period. However, analysts point out that brokerage earnings remain highly susceptible to market conditions, with traditional businesses such as brokerage commissions and proprietary trading still accounting for an overly large share of revenue, a situation that has been characterized as a "one-off event." Should trading activity cool down, earnings momentum could quickly reverse. In the second quarter of 2026, active equity mutual funds held a brokerage sector allocation of just 0.63% of their portfolios, sitting at a low 26th percentile over the past five years.