Hong Kong stocks opened lower and continued to slide during the morning session, though losses narrowed in the afternoon and toward the close. Sector-wise, intensifying geopolitical conflicts sent oil prices soaring, prompting a strong rebound across energy-related ETFs. Meanwhile, hawkish signals from the U.S. Federal Reserve and rising rate hike expectations weighed heavily on the non-ferrous metals sector, dragging its ETFs down. By the closing bell, the Hang Seng Index slipped 0.07% to 25,311.21 points, with full-day turnover reaching HK$216.691 billion. The Hang Seng Tech Index fell 0.74% to 4,517.16 points. Among the top Hong Kong ETFs by asset size, Tracker Fund of Hong Kong (02800) closed flat at HK$25.86, CSOP Hang Seng TECH Index ETF (03033) dropped 0.81% to HK$4.432, and Hang Seng China Enterprises Index ETF (02828) edged down 0.16% to HK$86.94.

Heightened geopolitical tensions ignited a rally in oil prices, driving a collective rebound in oil and gas ETFs. At the close, FTS S&P Oil & Gas Exploration & Production ETF (513350.SH) surged 5.52% to RMB 1.414, Harvest S&P Oil & Gas Exploration & Production ETF (159518.SZ) gained 3.15% to RMB 1.311, and CCB Energy & Chemical ETF (159981.SZ) advanced 2.12% to RMB 1.687. After U.S. military strikes on Iranian targets, Iran retaliated with drone attacks on a U.S. base in Bahrain, with the mutual strikes directly threatening safe passage through the Strait of Hormuz. East China Futures noted that escalating U.S.-Iran hostilities have intensified market concerns over a prolonged closure of the strait, pushing oil prices higher. Additionally, U.S. Treasury Secretary Bessent indicated that a significant volume of crude has recently passed through the Strait of Hormuz and that Iran's control over the waterway is weakening, but given heavy trading volumes over the past two days, oil prices are likely to remain range-bound with wide fluctuations in the short term.

On the flip side, hawkish signals from the Federal Reserve and rising rate hike expectations pressured the non-ferrous metals sector. At the close, Huatabao Non-Ferrous Metals ETF (159876.SZ) declined 2.69% to RMB 0.977, Huaan Non-Ferrous Metals ETF (512940.SH) fell 2.56% to RMB 0.837, and China Southern Non-Ferrous Metals ETF (512400.SH) lost 2.53% to RMB 1.886. At the Jackson Hole symposium, Fed Chair Warsh hinted at the possibility of further policy tightening if inflation fails to cool, fueling expectations for a September rate hike. The World Gold Council stated that hot U.S. inflation data and Warsh's hawkish comments have boosted market bets on a near-term Fed rate increase, thereby raising the opportunity cost of holding gold and diminishing its appeal. Minmetals Futures observed that Middle East tensions are driving oil prices and inflation expectations upward, intensifying the sell-off in U.S. Treasuries. The 10-year U.S. Treasury yield climbed to around 4.79%, while the U.S. dollar strengthened concurrently. High interest rates and a strong dollar are suppressing valuations in the elevated non-ferrous metals sector.

In terms of institutional outlook, Everbright Securities International noted in a research report that Hong Kong stocks currently lack incremental capital, with funds concentrated on high-performing stocks. Tech-heavyweight shares remain weak, and factors such as rising inflation expectations, elevated long-term bond yields, and yen carry trade unwinding risks are constraining upward momentum in the market. The brokerage maintains its view of range-bound trading for the Hang Seng Index, targeting an upside of 26,000 points and a downside support level around 25,000 points. On sector allocation, it believes that in the context of relatively high U.S. Treasury yields and diminished market risk appetite, utility stocks with ample cash flows offer safe-haven value.

Looking at ETF movements, Guotai Haitong Non-Ferrous Metals Mining ETF (561830.SH) made its debut, closing down 2.41% at RMB 0.971 with a turnover of RMB 20.9277 million. The fund tracks the CSI Non-Ferrous Metals Mining Thematic Index, covering industrial metals, precious metals, and rare metals. Meanwhile, E Fund Industrial Internet ETF (158027.SZ) also launched, ending its first session 1.9% lower at RMB 0.98 with a turnover of RMB 46.854 million. This fund tracks the CSI Industrial Internet Thematic Index, spanning hardware manufacturing (communication equipment, industrial robots, sensors, and industrial automation equipment), software development (industrial software, cloud platforms, and big data analytics), and application services (smart manufacturing solutions and industrial internet platform operations, among others).