Hong Kong Stocks Close Aug 6: HSI Falls 1.49% to 25,530; MiniMax Surges 17% on Stock Connect Inclusion; High-Low Switch Hints at Strategy Shift

On August 6, Hong Kong's three major indices opened lower and kept falling, ending the previous streak of strong rebounds. The Hang Seng Index closed at 25,530.28 points, down 385.54 points, or 1.49%. The Hang Seng Tech Index fell even deeper, closing at 4,820.78 points, down 2.28%. The HSCEI closed at 8,498.73 points, down 1.22%, while the Red Chip Index stood at 4,122.32 points, down 0.86%. Main board turnover reached HK$255.227 billion, notably higher than the previous trading day, clearly reflecting intensified bullish-bearish divergence.

Previously, on August 3, Hong Kong stocks kicked off August with a strong start, with the HSI briefly breaking through 26,000 points to hit a rebound high. On August 5, the market continued to climb steadily. Is this pullback a normal consolidation during the rebound or the start of a new correction? Looking at the market structure, it was not a broad decline but showed a distinct “high-low switch” pattern — high-flying tech and insurance stocks that had risen sharply faced profit-taking, while low-valuation defensive sectors such as coal and gold strengthened against the trend. The footprint of funds “shifting cages to change birds” was clear.

AI Model “Twin Stars” Surge Against Trend, Attracting Inflows on First Stock Connect Day

The biggest highlight of the day was the strong outperformance of the AI large-model track. MINIMAX-W (00100) was officially added to the Stock Connect list on August 6 and surged 17.1% on its first day, closing at HK$297.2. Zhipu (02513) also rose 4.42% to HK$1,087. The two are dubbed the “twin stars” of large models.

According to announcements from the Shanghai and Shenzhen exchanges, three Hong Kong stocks — MINIMAX-W, Luxshare Precision (02475), and Sanyang Group (06951) — were officially added to the Stock Connect list on August 6. Inclusion means mainland investors can directly buy and sell these stocks through the Stock Connect channel, potentially lifting liquidity and valuation benchmarks. LiveReport estimates that MiniMax could receive no less than HK$1 billion in allocation funds on its first day of inclusion; if its Stock Connect shareholding ratio reaches 20% to 25%, potential incremental funds could exceed HK$10 billion. Luxshare Precision also rose 4.18% to HK$61, showing a clear inclusion effect.

Notably, DeepSeek announced the same day that it would raise API service prices, with a relatively large expected increase. Analysts pointed out that this signals accelerated commercialization of domestic large models. Industry competition is expected to shift from “low-price market grabbing” to comprehensive competition in capabilities, scenarios, and monetization efficiency, benefiting leading players with technological moats. The domestic AI narrative is moving from “telling stories” to “counting the books,” and capital market pricing logic is changing accordingly.

Blue Chips Diverge Sharply: AIA Leads Losses, Wharf REIC Surges, CATL Under Pressure

Among blue chips, AIA (01299) plunged 5.92% to HK$73.15, dragging the HSI down about 73.9 points alone, making it the biggest drag of the day. On the news front, the market heard that Hong Kong insurance policy income might be included in the scope of overseas income taxation, with a current tax rate of 20%. Tax collection cases have already emerged in Beijing, Hangzhou and other places. Hong Kong insurance stocks came under collective pressure, with Prudential (02378) also falling 4.57%. Citi believes the market has overreacted, as structural demand for Hong Kong insurance in offshore asset allocation, multi-currency flexibility, and global medical services remains solid, but the shadow of regulatory uncertainty is hard to dissipate in the short term.

At the other extreme, Wharf REIC (01997) soared 13.72% to HK$30 after results. Its interim loss narrowed sharply by 92.69% year on year, and it announced raising the dividend payout ratio from 65% to 90%, with underlying dividends up 38%. The high-dividend strategy drew enthusiastic buying, contributing 9.25 points to the HSI in a single day.

CATL (03750) tumbled 5.05% to HK$628. Its Q2 overall gross margin was only 23.2%, close to the lowest level since 2024, coupled with profit margin uncertainty from early mass production of sodium-ion batteries, reigniting concerns about the profitability prospects of the new energy supply chain.

Coal and Gold Strengthen Against Trend; Defensive Safe-Haven Theme Favored

At the sector level, coal stocks led gains. On August 5, the thermal coal price index was raised across the board, with 5,500 kcal coal quoted at RMB 839/ton. Changjiang Securities research noted that 2026 marks the window for capacity reduction in the coal industry, with effective thermal coal supply expected to fall 1.9% year on year to 3.806 billion tons, putting short-term supply under pressure. Yankuang Energy (01171) rose 6.12% to HK$12.32; China Coal Energy (01898) gained 2.97% to HK$10.75. Great Wall Securities flagged that after the Shanxi coal mine incident, the comprehensive operating rate has kept declining, and summer peak power demand could trigger severe supply-demand mismatches.

Gold stocks were also active. Overnight, international gold prices surged more than 4% in a single day, briefly breaking through the $4,300 per ounce mark. U.S. July ADP employment data showed only 44,000 new jobs, far below the market expectation of 75,000. Cooling employment eased pressure on Fed rate hikes. Meanwhile, positive progress in U.S.-Iran talks over reopening the Strait of Hormuz pushed international oil prices down sharply, also easing energy inflation worries. Lingbao Gold (03330) rose 4.82%, Chifeng Gold (06693) gained 3.7%, and Zhaojin Mining (01818) rose 2.64%. CITIC Securities believes that accelerating U.S. fiscal deficit expansion, difficult-to-heal geopolitical rifts under deglobalization, and continued global central bank gold purchases together underpin gold, which remains in a major bull market.

Southbound Funds “Shift Cages and Change Birds”: Sell Tencent and Alibaba, Buy MiniMax

On the capital front, southbound funds recorded a net sell of HK$1.461 billion on the day. Shanghai-HK Stock Connect saw a net inflow of about HK$3.257 billion, while Shenzhen-HK Stock Connect saw a net outflow of about HK$4.717 billion, showing clear internal divergence. Southbound funds traded about HK$112.513 billion in total, accounting for 44.08% of total HSI turnover, as mainland capital's influence on Hong Kong stock pricing continues to strengthen.

Individual stock flows are even more telling, as southbound funds are actively rebalancing:

• Large net buys: MINIMAX-W (00100) HK$2.697 billion, KB Laminates (01888) HK$753 million, YOFC (06869) HK$593 million;
• Large net sells: Tencent (00700) HK$2.2 billion, Alibaba-W (09988) HK$1.627 billion, SMIC (00981) HK$1.076 billion, Xiaomi Group-W (01810) HK$322 million.

The reduction of leading tech stocks and the increase in new economy targets reflect mainland capital shifting from crowded traditional internet leaders to new AI targets with greater growth elasticity and event catalysts. Notably, the second phase of HKEX's reduction of minimum stock price spreads was implemented on August 3. Since the first phase took effect, bid-ask spreads have narrowed by 35% on average and order matching times have shortened by 30% on average. Continuous trading mechanism optimization is injecting new vitality into Hong Kong stocks.

Institutional Views: Rebound or Reversal? Two Thresholds to Cross

On the outlook for Hong Kong stocks, CSC pointed out that Hong Kong stocks are indeed emerging from multiple pressures, but whether they can achieve a true long-term bull market still requires crossing two important thresholds — corporate earnings improvement and loose dollar liquidity. The former determines the bull trend, while the latter determines the magnitude and flexibility of the bull market. Before truly crossing these two thresholds, Hong Kong stocks are closer to a valuation repair rally after the most stressful period has passed.

For cross-border investors, Hong Kong stocks currently present both structural opportunities and structural risks. On the one hand, institutional dividends such as the continued expansion of Stock Connect targets and trading mechanism optimization keep being released, and high-elasticity AI targets offer new sources of excess returns. On the other hand, faster sector rotation and greater intraday volatility demand higher stock-picking and timing skills. A balanced allocation between the AI growth theme and high-dividend defensive lines such as coal and gold, while closely tracking southbound capital flows and dollar liquidity changes, may be a safer strategy in a volatile market. Whether the HSI can regain the 26,000-point integer mark will serve as a key yardstick for testing the quality of this rebound.