This week, Hong Kong’s major equity indices posted strong gains, signaling renewed investor confidence amid policy tailwinds and strategic market shifts. The Hang Seng Index rose 3.20%, closing at 24,284.15 points, while the Hang Seng Tech Index climbed 4.06% to 5,341.43. The Hang Seng China Enterprises Index gained 2.76%, ending the week at 8,762.47 points. A notable surge was observed in financial and digital asset-related stocks, driven by regulatory advancements, corporate restructuring, and sector-specific catalysts.
Financial Stocks Rally on Strategic Upgrades
One of the most significant drivers behind the market momentum was the sharp rise in financial sector equities. China Financial Leasing (02312.HK) led the pack with a staggering 1407.94% weekly gain, fueled by a major ownership change. Longling Capital, linked to Meitu founder Cai Wensheng, acquired a 34.96% stake at HK$0.38 per share—a 13.43% premium—sparking speculation of a strategic pivot toward AI, Web3.0, and digital asset management.
👉 Discover how digital transformation is reshaping financial services today.
Another standout performer was Guotai Junan International (01788.HK), which surged nearly 200% in a single day after receiving approval from the Securities and Futures Commission (SFC) to upgrade its virtual asset trading license. This makes it the first Chinese-owned securities firm authorized to offer cryptocurrency and stablecoin trading services in Hong Kong—a landmark development aligning with the city's pro-innovation digital economy agenda.
Other financial firms including Shenyin & Wanguo Hong Kong (00218.HK), First Shanghai (00227.HK), and Victory Securities (08540.HK) also posted strong gains of over 24%, reflecting broad-based optimism in the sector as traditional finance increasingly converges with blockchain-enabled services.
Digital Asset Momentum Builds
Hong Kong’s evolving regulatory framework for digital assets has become a powerful catalyst for market activity. On June 26, the government released its Hong Kong Digital Asset Development Policy Declaration 2.0, introducing the "LEAP" framework to promote tokenized financial products and real-world asset (RWA) applications.
This policy shift boosted sentiment across tech and investment-linked stocks. Bluehole Interactive (08267.HK), known for its gaming and blockchain ventures, gained 39.29% as investors positioned for potential integration into digital asset ecosystems.
Meanwhile, Sixth Happiness, a jewelry brand that recently went public, saw its shares rise over 50% in just two trading days. With retail认购 exceeding HK$100 billion and oversubscription reaching 594 times, market participants are watching closely to see if it qualifies for inclusion in the Stock Connect program—contingent on maintaining a market cap above HK$730 million for three consecutive days. If successful, it would open access to mainland Chinese capital flows.
👉 Explore the future of tokenized assets and digital finance innovations.
Sectoral Performance: Winners and Losers
While financials and digital asset plays dominated the upside, other sectors faced headwinds.
Automotive Stocks Retreat Amid Pricing Pressure
The auto sector declined across the board. XPeng-W (09868.HK) dropped 3.17%, NIO-SW (09866.HK) fell 1.84%, and BYD Company (01211.HK) slipped 1.19%. The pressure stems from Xiaomi’s aggressive entry into the EV market with its SU7 series, priced competitively enough to disrupt existing players.
According to Citigroup analysts, Xiaomi could achieve monthly sales of 60,000 to 80,000 units at maturity. This has forced rivals like XPeng to consider price cuts—potentially lowering the G7 model to RMB 210,000—with Tesla also expected to respond with its own adjustments.
Healthcare Sector Faces Correction
Biotech stocks continued their pullback amid liquidity constraints and profit-taking after prior rallies. China Antibody-B (03681.HK) plunged 10.33%, Jacobio Pharmaceuticals-B (01167.HK) dropped 9.42%, and Elmab Therapeutics-B (01541.HK) lost 6.27%. Analysts attribute this to a combination of high valuations and tighter market conditions affecting risk appetite for early-stage medical firms.
Banking Sector Edges Lower
Banking stocks saw modest declines despite positive long-term outlooks. Luzhou Bank (01983.HK), Chongqing Bank (01963.HK), and China Merchants Bank (03968.HK) fell by 3.49%, 2.91%, and 2.39% respectively.
However, China Galaxy Securities remains optimistic about the second half of the year, citing a potential “triple convergence” of favorable factors: monetary and fiscal policies driving credit expansion, asymmetric interest rate cuts easing net interest margin pressure, and improved corporate asset quality due to debt resolution and real estate stabilization measures.
Copper Miners Shine on Supply Concerns
In contrast, copper-related equities outperformed amid global supply disruptions. Jiangxi Copper (00358.HK) jumped 7.71%, followed by MMG Limited (01208.HK) up 4.37%, and China Nonferrous Mining (01258.HK) rising 3.39%.
The surge follows escalating tensions around the U.S. Section 232 copper investigation, which is reshaping global trade flows and creating a historic price divergence between COMEX and LME markets. Goldman Sachs has raised its copper price forecast for 2025, setting a new target of $9,890/ton for Q3 and projecting a peak of $10,050/ton in August before moderating to $9,700/ton by year-end.
Individual Stock Highlights
Xiaomi Jumps on Strong SUV Demand
Xiaomi Group-W (01810.HK) climbed 3.60% to HK$58.95 after Deutsche Bank analyst Bin Wang reported robust pre-orders for its upcoming YU7 SUV—reaching 289,000 units within the first hour of launch, far exceeding the expected 100,000. The bank forecasts Xiaomi will deliver 100,000 units in H2 2025, marking a major milestone in its automotive ambitions.
Lithium Sector Rebounds on Demand Outlook
Tianqi Lithium (09696.HK) gained 6.78% to HK$29.15 as sentiment improved in the battery materials space. On June 24, the main lithium carbonate futures contract (2509) rebounded to RMB 60,700/ton from a recent low of RMB 58,400/ton.
Guotai Haitong analysts anticipate seasonal demand recovery during the traditional “golden September and silver October” period in Q3 2025. Combined with ongoing production cuts and inventory drawdowns, this could provide stronger support for lithium prices in the second half of the year.
Frequently Asked Questions
Q: What caused the surge in China Financial Leasing’s stock?
A: The rally was triggered by a strategic investment from Longling Capital, linked to Meitu’s founder Cai Wensheng. Investors expect a transformation into an AI and digital asset-focused asset management platform.
Q: Why did Guotai Junan International’s shares jump so sharply?
A: The company became the first mainland-affiliated broker approved by Hong Kong’s SFC to upgrade its virtual asset license, allowing it to offer crypto and stablecoin trading services.
Q: Is Sixth Happiness likely to join Stock Connect?
A: It may qualify if it maintains a market cap above HK$730 million for three consecutive days. Its strong IPO performance increases the likelihood of inclusion, opening access to mainland investors.
Q: What is driving copper prices higher?
A: Geopolitical trade concerns from the U.S. Section 232 investigation and strong demand forecasts have tightened supply expectations, pushing LME prices upward with a projected peak near $10,050/ton.
Q: How might Xiaomi’s YU7 impact the EV market?
A: With aggressive pricing and strong pre-order numbers, Xiaomi could pressure rivals like XPeng and NIO to lower prices or accelerate innovation to maintain competitiveness.
Q: Are financial stocks in Hong Kong poised for further gains?
A: Yes—regulatory support for digital assets, combined with improving macroeconomic conditions and potential rate cuts, creates a favorable environment for sustained growth in both traditional and fintech-oriented financial firms.