Hong Kong stocks experienced a volatile session, initially pressured by hawkish signals from Federal Reserve Chair Warsh at the Jackson Hole symposium, before staging a modest recovery. The benchmark Hang Seng Index closed 0.07% lower, down 17.8 points at 25,566.99, with full-day turnover reaching HK$314.819 billion. The Hang Seng China Enterprises Index advanced 0.27% to 8,513.18, while the Hang Seng Tech Index gained 0.32% to 4,619.87. On a monthly basis, the Hang Seng fell 1.23%, the H-shares index dropped 1.15%, and the tech index lost 4.34%.

Huatai Securities noted that September will bring a dense calendar of events and policies, yet the fundamental picture remains unclear. Trading activity is subdued, and market volatility is likely to stay elevated. Key factors include: 1) Rising rate hike probabilities following the global central bank meeting, though the September FOMC decision remains uncertain, leaving Hong Kong valuations exposed to dollar swings; 2) A lack of fresh catalysts for the AI supply chain; 3) Unclear domestic counter-cyclical policy support, with overall Hong Kong earnings remaining weak; 4) Lingering geopolitical and tariff issues.

Among blue chips, BANK OF CHINA (03988) hit a record high, surging 5.73% to HK$5.9 with HK$3.986 billion in turnover, contributing 34.77 points to the index. The bank reported H1 revenue of RMB 357.113 billion, up 8.41% year-on-year, and net profit attributable to shareholders of RMB 123.594 billion, up 5.1%—the fastest growth among the six major state-owned banks. Net interest income rose 10.2% in the first half, with net interest margin at 1.27%, up 1 basis point annually.

Other blue-chip movers included BYD Electronic (00285), which climbed 9.05% to HK$27, adding 2.78 points; Sunny Optical (02382), up 7.4% to HK$71.1, contributing 5.3 points; China Overseas Land (00688), which tumbled 9.33% to HK$12.53, dragging the index down 7.64 points; and Henderson Land (00012), off 7.32% to HK$26.86, shaving 4.68 points.

Where the market moved

Large-cap tech stocks showed mixed performance. Tencent dipped 0.48%, while Meituan rose nearly 2% following its earnings release. Mainland bank shares defied the broader weakness, rallying on solid interim results from the six major lenders and stabilizing net interest margins—BANK OF CHINA reached an all-time high. The sector was also buoyed by major policy reforms in property credit. Mainland property developers, however, opened higher but reversed sharply, with Greentown China plunging over 17%. PCB-related names, insurers, and coal stocks advanced. On the downside, gold stocks slid broadly on higher rate expectations, airline shares weakened after earnings shortfalls, and pharmaceutical and auto stocks lost ground.

A closer look at the winners

Mainland banks led the gains. Postal Savings Bank (01658) rose 6.96% to HK$5.3, BANK OF CHINA (03988) gained 5.73% to HK$5.9, Bank of Communications (03328) climbed 3.86% to HK$7.8, and China Construction Bank (00939) advanced 3.94% to HK$9.5. Collectively, the six major banks reported combined revenue exceeding RMB 2 trillion in H1, with all posting year-on-year net profit growth. BANK OF CHINA led with a 5.10% increase in attributable net profit. Notably, net interest margins—under pressure for two years—showed signs of stabilization, with several banks reporting improvements.

The Ministry of Housing and Urban-Rural Development, along with four other departments, rolled out a sweeping package of property market policy measures. CITIC Securities commented that these policies help align credit structures with the new development model for real estate, likely expanding loan headroom for banks' property exposure and improving asset quality expectations with high certainty.

Mainland property developers saw a high open followed by a sharp selloff. GREENTOWN CHINA (03900) tumbled 17.58% to HK$6.26, Sunac China (01918) dropped 10.37% to HK$0.605, and Seazen Development (01030) fell 5.84% to HK$1.37. On August 28, the People's Bank of China and the National Financial Regulatory Administration jointly issued guidelines to reform and improve real estate credit management. The policy mandates a lead bank system for development loans, with loan terms capped at five years for presale projects and seven years for completed units. Individual mortgage terms are extended to a maximum of 40 years, with loans for completed homes to be disbursed after sales filing, and presale units strictly after project completion filing.

Gold stocks fell broadly. LINGBAO GOLD (03330) slid 6.08% to HK$22.24, Zijin Gold International (02259) lost 5.71% to HK$152, and Chifeng Gold (06693) dropped 5.57% to HK$41.36. International precious metals prices tumbled this morning, with spot gold briefly breaking below $4,400 per ounce, the first time since August 19. The selloff followed Chair Warsh's hawkish Jackson Hole debut—the most hawkish such speech since 2009—hinting at rate hikes if inflation does not fall quickly. September rate hike odds jumped from 35% to nearly 60%, with markets pricing in two hikes before March 2027. Meanwhile, US strikes on Iranian Revolutionary Guard facilities on Larak Island, the first US military action against Iran in a month, pushed oil prices higher.

Airlines came under widespread pressure. CHINA EAST AIR (00670) fell 6.01% to HK$2.735, China Southern Airlines (01055) lost 5.18% to HK$3.11, and Air China (00753) dropped 5.04% to HK$3.77. After Air China and China Eastern released interim reports on August 30 evening, combined with China Southern's earlier filing, the three carriers posted a collective loss exceeding RMB 8 billion in H1. Jet fuel costs, the largest expense item for airlines, were the primary culprit. Air China's fuel costs rose RMB 8.439 billion year-on-year due to higher oil prices, while China Eastern's operating costs grew 15.05% to RMB 74.206 billion, also driven by fuel expenses.

Notable movers

HQVT (01392) soared 19.88% to HK$28.7 after reporting interim results. Revenue surged 84.5% year-on-year to approximately RMB 410 million, with multi-spectral AI large model services jumping 382.5% to RMB 320 million, further boosting its revenue contribution. By revenue, the company ranked first in China's multi-spectral AI and multi-spectral AI large model service markets in 2025.

Megasino (03268) gained 19.87% to HK$22.98, with both A-shares and H-shares rising. Hugging Face, the open-source AI community, launched Microduck, a $399 bipedal robot designed to lower entry barriers, supporting reinforcement learning, simulation, and open-source software development. The move sparked market interest in edge AI—running AI inference locally on devices rather than relying on cloud compute—in robotics applications.

Biren Technology (06082) exploded higher, up 18.81% to HK$46.62, after unveiling its 2026 interim results. H1 revenue reached RMB 1.236 billion, surging approximately 1,997.6% year-on-year, with losses narrowing sharply to RMB 377 million, a 76.4% reduction. Gross margin improved significantly to 42.7%. Sales of its Bili series products expanded steadily, with multiple benchmark projects delivered.

MINIMAX-W (00100) defied the downturn, climbing 16.18% to HK$349. MiniMax announced that H3 Max 768P and H3 Max 480P were now available on its open platform and MiniMax Design. H3 Max, post-trained by fal based on MiniMax H3's open-weight version, generates a five-second, 768p full audio-video clip in under three seconds, outpacing real-time playback speed.

BYD Electronic (00285) rallied 9.05% to HK$27. H1 net profit attributable to shareholders fell 75.35% to RMB 426 million, pressured by a cyclical downturn in smart device components and foreign exchange losses. However, in AI liquid cooling, the latest liquid-cooled cold plate product for a major overseas client has completed development and entered mass production ramp-up, delivering industry-leading heat dissipation efficiency for high-power chips.

China Literature (00772) gained 6.97% to HK$21.48, buoyed by short-drama momentum. "Journey to the West: The Return" is officially scheduled, marking China's first AI long-form drama to air on broadcast television, with visuals and performances fully generated by AIGC and no human actors. The market views this as validation that AI long-form dramas are moving from concept to finished product, with a commercial closed loop emerging. The company's interim report showed short-drama and AI animation revenue exceeding RMB 430 million in H1, up 2.3 times year-on-year.

MINISO (09896) slumped 12.57% to HK$18.57 after its earnings release. H1 revenue rose 22.4% to RMB 11.50 billion, but adjusted net profit (excluding FX effects) fell 1.7% to RMB 1.22 billion. Overseas revenue grew 14.9%, while same-store GMV declined in the low single digits. The company guided full-year adjusted net profit to fall in the high single digits, with adjusted operating margin down 3–4 percentage points year-on-year.