Oil prices surged and the Federal Reserve sent hawkish signals, the Hang Seng Index opened down 474 points. Tencent and AIA faced selling pressure after earnings, oil stocks rose while gold stocks fell | Hong Kong stock market opening

The Federal Reserve maintained interest rates as expected and mentioned that the impact of changes in the Middle East on the U.S. economy remains unclear, anticipating only a 0.25 percentage point rate cut by the end of this year; at the same time, Fed Chairman Jerome Powell stated at a press conference that there would be no rate cuts if there is no progress on inflation.

Market Concerns Over Micron's Increased Capital Expenditure

U.S. stocks ended a two-day rally on Wednesday, with all three major indices declining. The Dow Jones Industrial Average closed down 768 points or 1.63%, at 46,225 points; the S&P 500 fell 91 points or 1.36%, at 6,624 points; and the Nasdaq dropped 327 points or 1.46%, at 22,152 points. The Golden Dragon Index, which reflects the performance of Chinese concept stocks, fell 2.06% to 7,015 points on Wednesday. Additionally, under hawkish expectations from the Fed, gold prices were also sold off, with spot gold closing down 3.7% at $4,818 on Wednesday; it saw a slight rebound this morning, rising about 0.5% to $4,841.

In focus, Micron Technology (MU) announced a 196% increase in revenue for the second quarter of fiscal year 2026 to $23.86 billion, exceeding expectations; adjusted net profit surged 686% to $14.021 billion; the midpoint of third-quarter revenue guidance was over 50% higher than analysts' expectations, and EPS guidance was nearly 70% above expectations. However, the market is concerned about Micron's increased capital expenditure, which has been revised upward to over $25 billion for the year, with further increases expected in fiscal year 2027. The stock fell sharply over 4% in after-hours trading to $441.28.

Tencent Reduces Buyback Scale for AI Investment

In Hong Kong stocks, the Hang Seng Index opened down 474 points at 25,550 points. Tech stocks were generally under pressure, with Tencent (700) indicating after its earnings that funds would be allocated for AI investment, potentially reducing the scale of buybacks. The stock opened at HKD 528, down 4%; Alibaba (9988), which will report earnings today, also fell 3.6%; Meituan (3690) dropped 2%; JD.com (9618) fell 2.5%; while Xiaomi (1810) rose 2.6% against the trend.

MINIMAX (100) and Zhihui (2513), which surged yesterday, also saw profit-taking, with both opening down 5% and 4.4%, respectively.

AIA's New Business Value Rises 15% Year-on-Year

Additionally, AIA (1299) announced its performance for last year, with new business value rising 15% year-on-year to a record high of $5.516 billion at constant exchange rates, and the final dividend increased by 10% to HKD 1.4408. According to the capital management policy, the board has approved a new round of $1.7 billion share buybacks. However, the stock opened at HKD 81.5, down 3.6%.

Oil Stocks Rise, Gold Stocks Fall

On the other hand, Iran and Israel have launched strikes against key energy facilities in the Middle East, driving oil prices up, with Brent crude oil nearing $110 again, boosting oil-related stocks. CNOOC (883) rose 2.5%; PetroChina (857) increased 0.6%; Shandong Molong (568) surged 15%; and Baker Hughes (2178) rose over 13%Gold-related stocks fell, with Zijin Gold International (2259) down 4.8%; Zijin (2899) down 4.6%; Zhaojin (1818) down 4.7%; and Shandong Gold (1787) also down 4.7%.

In terms of northbound capital flow, there was a net purchase of HKD 1.217 billion in Hong Kong stocks yesterday, with Alibaba (9988), Xiaomi (1810), and Chongqing Chuanwei Optical Fiber Cable (6869) receiving net purchases of HKD 1.536 billion, HKD 565 million, and HKD 146 million, respectively; while SMIC (981), Tencent (700), and Yaocai (1428) experienced net sales of HKD 774 million, HKD 296 million, and HKD 145 million, respectively