On Wednesday, October 7, Hong Kong's three major indices all closed lower. The Hang Seng Index ended at 24,130.50 points, down 150.06 points or 0.62%; the Hang Seng Tech Index closed at 4,194.49 points, down 28.59 points or 0.68%; and the Hang Seng China Enterprises Index finished at 8,082.40 points, down 46.57 points or 0.57%.
Among Hong Kong ETFs, the most actively traded products by turnover mostly declined: Tracker Fund of Hong Kong (02800) closed at HK$24.760, down 0.64%; Hang Seng China Enterprises (02828) closed at HK$82.880, down 0.58%; CSOP Hang Seng Tech Index (03033) closed at HK$4.112, down 0.68%; and CSOP SK hynix 2x (07709) closed at HK$37.260, down 6.71%.
Sector Performance
The two previous market leaders, semiconductors and pharmaceuticals/biotech, pulled back together and were the main drags on Hong Kong stocks that day. The semiconductor sector fell broadly, with Montage Technology (688008) dropping over 6% and GigaDevice (603986) falling more than 3%. The pharma/biotech sector suffered a sharp reversal after surging the previous trading day, with the Hang Seng Biotech Index falling as much as over 4% intraday. Genscript Bio (01548) closed down 12.70%, and Hong Kong pharma-themed ETFs declined in tandem: ChinaAMC Hang Seng Biotech (03069) closed at HK$16.550, down 2.42%, while CSOP Hang Seng Biotech (03174) closed at HK$3.920, down 2.63%.
Leveraged and cross-border products showed mixed performance, with semiconductor-themed leveraged products leading the market's declines. CSOP SK hynix 2x (07709) closed at HK$37.260, down 6.71%, the biggest decliner among exchange-traded products that day. CSOP 2x Long Samsung Electronics (07747) closed at HK$78.080, down 2.69%; E Fund Asia Semiconductor ETF (03486) closed at HK$19.770, down 2.71%; and GlobalX Asia Semiconductor (03119) closed at HK$183.600, down 1.77%.
Crypto asset-related inverse products strengthened against the trend. CSOP 2x Short Coinbase (07311) closed at HK$5.385, up 4.66%, the top gainer in this category; CSOP 2x Short MSTR (07399) closed at HK$10.000, up 3.68%. On the other hand, Ether-themed products came under broad pressure: ChinaAMC Ether (03046) closed at HK$6.155, down 3.75%, and FA CSOP Ether (03068) closed at HK$11.240, down 3.68%.
Short products rose across the board, confirming the direction of the broader market correction. CSOP 2x Short Hang Seng Index (07500) closed at HK$1.840, up 1.10%; CSOP 2x Short Hang Seng Tech (07552) closed at HK$2.074, up 0.97%; and CSOP 2x Short HSCEI (07588) closed at HK$1.622, up 1.37%. Inverse products collectively advanced, in line with the day's market correction.
Gold-themed products edged lower, while high-dividend and covered-call strategy products showed mixed performance. Gold ETF-Hang Seng (03170) closed at HK$13.060, down 0.08%; CSOP 2x Long Gold (07299) closed at HK$21.180, down 0.09%; and SPDR Gold (02840) closed at HK$2,972.000, down 0.83%. Among income-type products, Hang Seng High Dividend (03466) closed at HK$18.810, up 0.48%; GlobalX Hang Seng High Dividend (03110) closed at HK$29.180, up 0.27%; and GlobalX Hang Seng Covered Call (03419) closed at HK$8.985, down 0.11%. Real estate investment trusts were steady, with LINK REIT (00823) closing at HK$36.920, up 0.16%.
Institutional Views
Galaxy Securities believes Hong Kong stocks will remain focused on structural defense in the short term, needing clearer rate signals, and lacking catalysts for a trend reversal upward. Some funds had previously bet on a rebound once the rate hike landed, but the overall tone of the Federal Reserve's September meeting was more hawkish than market expectations. On investment strategy, three main lines should be grasped, most likely structural defense and selective offense led by existing foreign capital and local funds: first, computing hardware and AI infrastructure names with real orders and earnings support, which are relatively resilient, while pure-concept names lacking earnings delivery may face greater liquidity discounts; second, innovative drugs and the CXO sector, as foreign capital has recently flowed heavily into pharma/biotech, and innovative drugs have already recovered after the rate hike landed, requiring careful stock selection and profit-taking discipline; third, low-volatility dividend plays, as the necessity of defensive allocation rises in a high-rate environment with southbound flows absent, with attention suggested on utilities, telecom, energy, and financials.
Bohai Securities noted that AI drug discovery catalysts have been密集 recently, with the industry focus gradually shifting from model capabilities to wet-lab validation efficiency and other aspects. It suggests paying attention to investment opportunities in AI drug discovery-related sub-sectors such as gene synthesis, protein expression, reagents and consumables, animal models, and clinical trials. Meanwhile, the 2026 ESMO annual meeting is approaching, and excellent clinical data is expected to be read out, bringing密集 catalysts to the sector. It recommends focusing on investment opportunities in innovative drugs, CXO, and the upstream life sciences supply chain.