According to the Zhongtong Finance and Economics app, the weaker-than-expected US non-farm payroll data in August has once again raised concerns about economic recession. The Hong Kong stock market fell throughout the day, with all three major indices falling more than 2% at one point. At the close, the Hang Seng Index fell 1.42% or 247.34 points to 17,196.96, with a total daily turnover of HKD 133.665 billion. The Hang Seng China Enterprises Index fell 1.68% to 6,002.91, and the Hang Seng Tech Index fell 1.46% to 3,436.75.

Galaxy Securities believes that in the short term, investors are concerned about the impact of the weaker-than-expected US non-farm payroll data combined with expectations of a rate hike by the Bank of Japan, which will continue to disturb market sentiment. The overall trend of the Hong Kong stock market may remain volatile. As the September rate cut by the Federal Reserve approaches, attention should be paid to technology stocks that are expected to benefit from the rate cut. In the medium and long term, the fundamentals of the Hong Kong stock market are more dependent on the domestic economy, and attention should be paid to positive signals from domestic policies.

Blue chip performance

PetroChina (00857) led the decline in blue-chip stocks. At the close, it fell 6.17% to HKD 5.93, with a turnover of HKD 2.349 billion, dragging down the Hang Seng Index by 13.24 points. Morgan Stanley lowered its target price for Brent crude oil for the second time in a matter of weeks, as demand continues to slow despite ample supply. Morgan Stanley's latest forecast for Brent crude oil in the fourth quarter is $75 per barrel, lower than the previous forecast of $80.

As for other blue-chip stocks, Wuxi Apptec (02359) rose 3.9% to HKD 35.95, contributing 0.75 points to the Hang Seng Index; JD Health (06618) rose 2.56% to HKD 24, contributing 1.07 points to the Hang Seng Index; OOIL (00316) fell 5.76% to HKD 93.3, dragging down the Hang Seng Index by 1.21 points; Sinopec (00386) fell 5.59% to HKD 4.39, dragging down the Hang Seng Index by 10.24 points.

Hot sectors

On the market, large tech stocks are all in the red, with Alibaba down 1.88% and Tencent down 0.59%; concerns about demand prospects have put pressure on oil prices, leading to another decline in petroleum stocks; real estate developers' sales fell short of expectations, putting pressure on mainland real estate stocks, and Midea Real Estate fell nearly 18% on ex-dividend date; coal industrial concept stocks, home appliances stocks, nonferrous metals stocks, infrastructure stocks, and industry stocks all declined. On the other hand, some biomedical stocks rose against the trend, with Edenbridge outperforming K drugs, and Akeso Bio rose over 15%.

1. Petroleum stocks lead the decline. At the close, PetroChina (00857) fell 6.17% to HKD 5.93; CNOOC (02883) fell 5.92% to HKD 6.36; Sinopec (00386) fell 5.59% to HKD 4.39; CNOOC (00883) fell 3.83% to HKD 19.08.

On Friday, the US Bureau of Labor Statistics released data showing that US non-farm payroll employment in August increased by 0.142 million, lower than the expected 0.165 million. At the same time, the number of new jobs added in June and July was revised downward significantly by 0.061 million and 0.025 million, respectively. Market concerns about economic recession and the outlook for oil demand have put pressure on oil prices. It is reported that WTI crude oil futures for October fell 2.14%, with a cumulative decline of 7.99% last week. Brent crude oil futures for November fell 2.21%, with a cumulative decline of 9.82% last week.

2. Mainland real estate stocks collectively fell. At the close, Midea Real Estate (03990) fell 17.88% to HKD 2.48; R&F Properties (02777) fell 9.21% to HKD 0.69; Shimao Group (00813) fell 7.69% to HKD 0.6; Seazen (01030) fell 6.92% to HKD 1.48.

Open Source Securities pointed out that the overall recovery progress of the real estate market in the first half of 2024 was lower than expected, and the decline in sales collection also suppressed the land acquisition motivation of real estate companies. The top real estate companies have seen significant year-on-year declines in sales and land acquisition data. Under the pressure of declining gross margin and increasing sales expenses, the profitability of real estate companies has declined, and their performance has been under pressure. However, during the industry clearance process, high-quality real estate companies have optimized their debt structure and reduced financing costs, and are bullish on the future market share. The real estate policy remains loose in the first half of the year, and it is expected that the decline in real estate sales data will continue to narrow in the second half of the year due to the low base.

3. Nonferrous metals stocks are generally under pressure. At the close, CMOC Group Limited (03993) fell 5.34% to HKD 5.5; Zijin Mining Group (02899) fell 3.63% to HKD 13.82; Jiangxi Copper Co., Ltd. (00358) fell 3.56% to HKD 11.92; Aluminum Corporation of China (02600) fell 3.23% to HKD 4.49.

US non-farm payroll employment in August increased by 0.142 million, lower than the market's expectation of 0.161 million. The significant downward revision of the non-farm payroll employment figure has once again triggered market recession concerns, leading to a significant decline in global risk appetite and a resonant drop in the nonferrous metals sector. Sealand Securities previously pointed out that nonferrous metals and precious metals are affected by the rotation of liquidity expectations and experience significant volatility. Since June, the high speculative behavior of nonferrous metals has been greatly relieved, with prices significantly falling from the first half of the year, and downstream processing fees have also rebounded. As chip congestion returns to a healthy range, the bottom of nonferrous metals prices is becoming clear.

4. Mainland banking stocks continue to decline. At the close, China Merchants Bank (03968) fell 3.8% to HKD 29.15; Bank of Communications (03328) fell 2.24% to HKD 5.23; Bank of China (03988) fell 1.47% to HKD 3.34; Industrial and Commercial Bank of China (01398) fell 1.19% to HKD 4.16.

Recently, there has been a renewed call in the market for a reduction in interest rates on existing home loans. Tianfeng Securities analyst stated that from the perspective of institutional behavior, a reduction in interest rates on existing home loans would to some extent impact banks' existing business, potentially exacerbating asset and profit shortages. However, Morgan Stanley believes that the stock prices of China Mainland Banking stocks will fall after the news is released because the market will calculate the worst-case scenario in terms of value. If the actual announcement is a uniform reduction of 80 basis points, this will impact the view that its net interest margin is stabilizing.

Popular fluctuating stocks

1. Akeso (09926) performed strongly throughout the day. At the close, it rose 15.77% to HKD 55.8.

Akeso announced positive data from the phase III AK112-303 (HARMONi-2) study comparing Iovsolizumab with Pembrolizumab (K drug) mono-therapy as first-line treatment for locally advanced or metastatic non-small cell lung cancer (NSCLC) with positive PD-L1 expression (PD-L1 TPS≥1%) at the 2024 World Lung Cancer Congress. CICC stated that AK112 is superior to Keytruda head-to-head and is expected to become the cornerstone drug of the next generation of IO therapy.

2. NIO-SW (09866) soared after its performance report. At the close, it rose 13.05% to HKD 38.55.

NIO achieved a historic high revenue of 17.446 billion yuan in the second quarter, a year-on-year increase of 98.9%. Of this, the revenue from the automotive business was 15.68 billion yuan, a year-on-year increase of 118.2%. The gross margin of the vehicles was 12.2%, a year-on-year increase of 6 percentage points. The net loss narrowed by 16.7% compared to the same period last year. In the second quarter, NIO delivered a total of 0.0574 million vehicles, a year-on-year increase of 143.9% and a quarter-on-quarter increase of 90.9%.

3. CR Holdings (01911) resumed trading and plummeted. At the close, it fell 66.3% to HKD 2.45.

CR Holdings announced that Xu Yanqing, the wife of controlling shareholder Bao Fan, has been appointed as a non-executive director, and Sun Qianhong has resigned as a non-executive director, both effective from September 6th. In addition, CR Holdings announced that four executive directors (holding a total of 2.2% of the shares) have committed not to sell any company shares or equity during the period from September 8th to March 7th, 2025. Each executive director can terminate the lock-up commitment by giving written notice to the company at least 5 days in advance.

Ascend Energy Holdings Limited (02459) fell significantly, closing down 23.08% at HK$0.6.

On September 9th, the Hang Seng Index Company announced that Ascend Energy Holdings Limited will not be included in the relevant index in the quarterly index adjustment effective on September 10th, as it is on the Hong Kong Securities and Futures Commission's list of highly concentrated equity. Previously, it was expected that Ascend Energy Holdings would be included in the Stock Connect this month if it is not on the highly concentrated equity list.

New stocks debut.

Jixin State-owned Controlling (08629) opened high and fell low. It closed down 4.04% at HK$9.5.

Jixin State-owned Controlling priced its shares at HK$9.9 per share, issuing a total of 10.179 million shares with a minimum trading unit of 500 shares. The net proceeds are expected to be approximately HK$59.4 million. It is reported that Jixin State-owned Controlling is mainly engaged in construction project testing and inspection services. The company provides a range of construction project testing and inspection services, covering different types of testing and inspection processes in the industry. According to a report by Zhuoshi Consulting, Jixin State-owned Controlling is at the forefront of technical and service levels in the field of construction project testing in the western part of Guangdong province.