HK Midday: Hang Seng Tumbles 2% as Alibaba's Record HK$80 Bln Placement Hammers Techs; Gold, Oil Stocks Shine

Hong Kong's three major indices fell sharply on August 24. As of press time, the Hang Seng Index dropped 2.00% or 520.99 points to 25,488.47, with mainboard turnover reaching approximately HK$99.3 billion. The Hang Seng China Enterprises Index shed 2.08% to 8,454.46, while the Hang Seng Tech Index slumped about 3.5%. Alibaba's first-ever placement of HK$80 billion in new shares since its 2019 Hong Kong listing triggered a broad tech selloff, weighing heavily on overall market sentiment.

Across the board, tech names suffered heavy losses — Alibaba tumbled nearly 10%, sinking below its placement price, while Tencent, Meituan and Xiaomi fell between 3% and 4%. Bucking the trend, oil and petrochemical stocks advanced, with Sinopec surging nearly 6%. Gold miners broadly rallied as bullion prices hit fresh record highs, with Zhaojin Mining up nearly 8% and Lingbao Gold up nearly 5%. Brilliance Auto jumped over 8% post-results.

Tech Stocks Tumble as Alibaba Drops Nearly 10% Below Placement Price

As of press time, Alibaba Group-W (09988.HK) plunged 9.4% to HK$111.5 on turnover exceeding HK$18.1 billion, with the stock falling below its HK$112.7 placement price. Tencent Holdings (00700.HK) declined 3.6% to HK$440.6 on turnover of over HK$5.1 billion; Meituan-W (03690.HK) lost 3.1% to HK$82.35; Xiaomi Corporation-W (01810.HK) fell 4.3% to HK$27.76; NetEase-S (09999.HK) dropped 4.9% to HK$192.2; and Kuaishou-W (01024.HK) slid 3.9% to HK$33.08.

On August 23, Alibaba announced plans to place 710 million new shares to non-U.S. persons outside the United States at HK$112.7 per share, representing an approximately 8.4% discount to the previous closing price, raising total proceeds of approximately HK$80 billion. The net proceeds will be entirely allocated to investing in full-stack AI capabilities and strengthening AI infrastructure. This marks Alibaba's first new share placement since its Hong Kong listing in 2019 and is the largest such placement in Hong Kong stock market history. Market concerns that other tech firms may follow Alibaba's fundraising move weighed on the sector. Adding to the pressure, renowned investor Michael Burry was disclosed to have liquidated his Alibaba position. Baidu (09888.HK), which clarified it has no share issuance plan, fell 3.7% to HK$89.8, relatively resilient compared to peers.

Oil and Petrochemical Stocks Rally; Sinopec Jumps Nearly 6%

As of press time, China Petroleum & Chemical Corporation (00386.HK) surged 5.8% to HK$4.66 on turnover exceeding HK$796 million, hitting a near three-month intraday high and extending its winning streak to seven consecutive sessions.

Sinopec reported interim results with net profit rising 19.3% year-on-year to RMB 25.63 billion, earnings per share of 21.2 fen, and an increased interim dividend of 10.5 fen. Revenue grew 2% to RMB 1.43 trillion, driven by elevated oil prices and upstream production growth. The company plans a significant ramp-up in second-half capital expenditure to as much as RMB 99.9 billion, with a focus on exploration and development.

Gold Miners Surge; Zhaojin Mining Up Nearly 8%

As of press time, Zhaojin Mining (01818.HK) jumped 7.8% to HK$27.5; Lingbao Gold (03330.HK) rose 4.8% to HK$26.42; Shandong Gold (01787.HK) gained 3.5% to HK$28.44; CMOC Group (03993.HK) advanced 4.8% to HK$17.82; and Zijin Mining Group (02899.HK) added 1.6% to HK$39.18.

NYMEX gold futures breached the US$4,700 per ounce mark, with spot gold up 1% intraday at US$4,651. ING strategists noted that with recovering investment demand and growing unease over the U.S. fiscal outlook, gold prices have rebounded sharply from the July low of around US$4,000 to approximately US$4,600, returning to levels last seen in May. The prospect of the U.S. Treasury potentially expanding its bond buyback program has reignited currency debasement concerns, further enhancing gold's appeal as a store of value.

Brilliance Auto Surges Over 8% Post-Results

As of press time, Brilliance Auto (01114.HK) rallied 8.1% to HK$2.60, having surged as much as 13.1% intraday to a high of HK$2.72, on turnover exceeding HK$150 million.

Brilliance Auto reported interim results with attributable profit of RMB 779 million, down 54.24% year-on-year, in line with market expectations. Earnings per share stood at 15.43 fen, with an interim dividend of 50 HK cents. Despite profit halving, the company maintained its dividend payout, and with a prior profit warning already setting expectations, the stock rallied against the broader market weakness.

In other sectors, semiconductor stocks fell, with SMIC (00981.HK) down 3.8% at HK$69.75 and Hua Hong Semiconductor (01347.HK) down 3.7% at HK$110.6. New energy vehicle stocks broadly declined, with BYD Company (01211.HK) down 2.2% at HK$91.15 and Li Auto-W (02015.HK) down 2.2% at HK$50.1. Pop Mart (09992.HK) bucked the trend, rising 3.4% to HK$154.0.