Hong Kong stocks closed mixed on July 2 (Thursday), with the Hang Seng Index rising 0.76% to 23055.03 points, while the Hang Seng Tech Index fell 0.40% to 4454.28 points. Traditional sectors including autos and gold rallied on strong June delivery data and dovish Federal Reserve commentary, while semiconductor and PCB stocks collapsed following market rumors that Meta plans to shift focus from AI models to cloud services and lease excess computing capacity. The divergence reflected a sharp sector rotation as investors moved capital from high-valuation technology hardware into cyclical industries showing near-term fundamental improvement.
BYD and Gold Stocks Lead Traditional Sector Rally on June Data
Automotive stocks surged on strong June delivery figures, with BYD shares jumping 8.07% after reporting record monthly sales of 403,500 units. Gold stocks rallied as spot gold prices climbed to $4,114 following neutral-to-dovish commentary from Federal Reserve officials, reducing near-term rate hike expectations. China Gold International and Lingbao Gold rose approximately 11.4% and 10.4% respectively. Pork stocks gained as national hog prices returned to the "10 yuan era," with Dekang Agricultural up 13% and Muyuan up 10%. Pharmaceutical stocks with weight-loss drug exposure also advanced, led by CSPC Pharmaceutical Group and Innovent Biologics.
Semiconductor and PCB Stocks Plunge on Meta AI Infrastructure Concerns
Technology hardware stocks suffered sharp declines after market rumors suggested Meta would pivot from AI model development to cloud business expansion and monetize surplus computing capacity. The speculation triggered fears of AI infrastructure investment peaking and overcapacity, causing Yangtze Optical Fibre and Cable to fall 22.36%, GigaDevice to drop over 18%, and SMIC to decline 10.07%. PCB-related stocks also retreated on profit-taking and shareholder reduction pressure, with Kingboard Laminates falling 15.48% following major shareholder divestment.
CITIC and Huatai Analysts Highlight PMI Recovery and Stock Connect Adjustments
CITIC Securities noted that June manufacturing PMI rose to 50.3%, returning to expansion territory and indicating external demand support for industrial production. The firm observed continued divergence between new and traditional growth drivers, with high-tech manufacturing showing stronger momentum while raw material sectors remain in consolidation. Huatai Securities projected that 51 stocks will be added to the Hong Kong Stock Connect list in the September adjustment, with capital flows favoring technology and pharmaceutical sectors. The firm cautioned that southbound capital front-running has already occurred, potentially amplifying volatility in affected stocks post-inclusion.
FAQ
What caused the Hang Seng Tech Index to fall on July 2 despite the main index rising?
The Hang Seng Tech Index fell 0.40% to 4454.28 points due to a sharp selloff in semiconductor and technology hardware stocks, triggered by market rumors that Meta plans to shift focus from AI model development to cloud services and lease excess computing capacity. This sparked investor concerns about AI infrastructure investment peaking and overcapacity, causing stocks like Yangtze Optical Fibre to drop 22.36% and SMIC to fall 10.07%.
Why did BYD shares rise 8.07% on July 2?
BYD shares jumped 8.07% after the company reported record June sales of 403,500 units, driving a broader rally in the automotive sector as strong delivery data signaled robust demand momentum.
What did CITIC Securities say about June manufacturing PMI?
CITIC Securities reported that June manufacturing PMI rose to 50.3%, returning to expansion territory, and noted that external demand recovery is supporting industrial production while policy support is expected to strengthen domestic demand stabilization.
