Market Performance Overview
On the final trading day of June, Hong Kong's three major stock indices experienced a late-session plunge. The Hang Seng Index closed down 0.87% at 24,000 points, while the HSCEI and Hang Seng TECH Index fell 0.96% and 0.72% respectively. Despite this daily fluctuation, June marked a positive month and an exceptionally strong half-year performance for Hong Kong stocks, with notable growth in:
- New consumer sectors
- Stablecoin-related concepts
- Rare earth and gold stocks
Half-year cumulative gains:
- Hang Seng Index: 20%
- HSCEI: 19.05%
- Hang Seng TECH Index: 18.68%
Sector-Specific Movements
Technology and Finance
- Mixed performance among large tech stocks: Xiaomi & NetEase (+1%), Meituan (-3%), Alibaba (-2%)
- Financial stocks continued Friday's correction trend after previously driving market gains
Commodities and Industrials
📉 Declining sectors:
- Gold & precious metals (-2-3%)
- Automotive (-1-3%)
- Property developers
- Oil
- Heavy machinery
📈 Rising sectors:
- New consumer segments (collective surge)
- Aerospace/defense stocks (consistent strength)
- Consumer electronics
- Biopharmaceuticals
Key Market Developments
1. Cryptocurrency Sector Boom
👉 Why stablecoin stocks are surging in Asian markets
Major movers:
- New Huo Technology Holdings (+31%)
- Guotai Junan International (+13%)
- OKG Technology Holdings (+12%)
Regulatory developments:
- U.S. Senate passed stablecoin legislation (pending House approval)
- Hong Kong legislature approved stablecoin bill in May
- South Korea's president pledged to allow corporate stablecoin issuance
2. Pharmaceutical Outsourcing Growth
Leading performers:
- WuXi AppTec (+12%)
- Tigermed Consulting (+7%)
- Asymchem Laboratories (+5%)
Catalysts:
- China's NMPA proposed shortening clinical trial review from 60→30 days
- HSBC research notes CRO efficiency advantages in China
- Innovation demand shifting to Asian markets
3. Defense Sector Outlook
Top gainers:
- AVIC International Holding (+6%)
- China Aviation (+4%)
Analyst insight (SWS Research):
- Global military demand expanding amid geopolitical shifts
- "9.3 Military Parade" may reveal new equipment matching 15th Five-Year Plan
- Potential for valuation and fundamental improvements
Commodities and Banking Trends
Gold Market Correction
- Spot gold fell below $3,260/oz (-0.45%)
- Silver futures down 1% to $36.01/oz
CITIC Securities analysis:
- Trump policy uncertainty drove Q2 price surge
- Risk of correction if geopolitical tensions ease
Banking Sector Pullback
Notable decliners:
- Bank of Tianjin (-43%)
- Zhengzhou Bank (-2%)
Market context:
- Technical adjustment after 20% YTD gains for some banks
- June LPR remained unchanged
- Analysts view this as healthy consolidation
Automotive Sector Shift
📉 Major decliners:
- Li Auto (-3%)
- Leapmotor (-2%)
- BYD (-1%)
Dongwu Securities 2025 outlook:
- Electric vehicle boom nearing maturity
- Intelligent vehicle trends becoming next growth driver
- Commercial vehicles/two-wheelers emerging as complementary plays
Capital Flows and Market Outlook
- Southbound inflows: HK$5.22B net purchase
Standard Chartered Wealth's 12-month targets:
- Hang Seng: 25,500
- S&P 500: 6,410
- Nasdaq 100: 23,650
Risk factors include:
- Middle East geopolitics
- U.S. tariff policies
- Inflation/debt concerns
FAQ Section
Q: Why did Hong Kong stocks surge 20% in H1?
A: The growth was driven by new consumer sectors, stablecoin innovations, and strong commodity performance, combined with mainland capital inflows and improved global risk sentiment.
Q: Which sectors show the most promise for H2?
A: Defense, biopharma, and consumer tech appear strongest, while stablecoins and rare earths may continue their momentum if regulatory support persists.
Q: How significant is the stablecoin legislation?
A: 👉 How global stablecoin regulations are reshaping finance - The coordinated moves by the U.S., Hong Kong, and South Korea signal growing institutional acceptance of blockchain-based assets.
Q: Should investors be concerned about the gold pullback?
A: While short-term volatility exists, gold's traditional hedge against uncertainty maintains its long-term appeal, especially with ongoing geopolitical tensions.