Hong Kong Stocks Mixed as Mideast Tensions Lift Oil, Tech Rallies on AI Outlook

Hong Kong's Hang Seng Index edged down 0.17% amid rising geopolitical tensions in the Middle East, which sent oil prices soaring and boosted related energy and shipping stocks. However, the broader market was mixed, with technology hardware shares rallying strongly on an optimistic outlook for AI infrastructure demand.

Geopolitical Tensions Roil Energy and Shipping

Market sentiment was primarily driven by events in the Middle East after U.S. Central Command announced it had destroyed five Iranian oil tankers. The action was described as a response to attempted ballistic missile attacks on U.S. naval vessels, according to the source report. The situation escalated, pushing Brent crude futures up 2.3% to break the $100 per barrel threshold.

The immediate impact was felt in the energy and shipping sectors:

• Oil Tankers: Daily rates for Very Large Crude Carriers (VLCCs) climbed to between $160,000 and $170,000, lifting shares of companies like COSCO Shipping Energy (01138) by over 5%.
• Shipbuilding: Increased demand for vessels amid potential shipping disruptions boosted China Shipbuilding Industry (00317) by more than 6%.
• Coal & Metals: With oil prices elevated, coal stocks such as Yancoal Energy (01171) and China Shenhua (01088) saw gains of over 2%. Industrial metals also advanced, with LME three-month aluminum closing at $3,341 per ton and lifting producers like China Hongqiao (01378) by over 4%.

Tech Hardware Surges on Upgraded AI Forecasts

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In a sharp contrast to the geopolitical headwinds, the technology hardware sector, particularly optical communications, saw significant gains. The rally was fueled by a Goldman Sachs report that substantially raised its global shipment forecasts for optical modules from 2026 to 2028, citing the rapid migration of AI server architecture to high-speed networks.

This bullish outlook is based on the growing demand for 800G, 1.6T, and 3.2T modules required by advanced GPU and ASIC chips. Hon Teng Precision Technology (06088), a key supplier to Nvidia, jumped over 7% after showcasing its 1.6T products. Similarly, Yangtze Optical Fibre and Cable (06869) also rallied more than 7%.

AI PC and Commercial Vehicle Sectors Advance

The AI theme also benefited PC makers, with Lenovo Group (00992) climbing nearly 7%. While global PC shipments fell 4.9% year-over-year in the second quarter, according to IDC data cited in the report, Lenovo's PC revenue reportedly grew by approximately 30% by focusing on higher-value models. Gartner has forecast that AI PCs could account for 55% of all PC shipments by 2026.

Separately, commercial vehicle manufacturers like Sinotruk (03808) and Weichai Power (02338) gained over 4% and 6%, respectively. The gains came ahead of the Hannover International Motor Show, where the companies are expected to unveil new electric and hydrogen-powered vehicles.