Market Overview - The geopolitical tensions in the Middle East have led to a decline in market sentiment, with Hong Kong's three major indices maintaining a downward trend. The Hang Seng Index fell by nearly 300 points, closing down 1.12%, while the Hang Seng Tech Index dropped 1.46% [1][2]. Stock Performance - Major technology and financial stocks experienced widespread declines, with Meituan down 3.5%, Alibaba and Baidu each falling over 2%. Real estate stocks also performed poorly, with China Fortune Land Development down nearly 7% and New World Development down nearly 6% [2][4][7]. - The market saw significant movements in small-cap oil and gas stocks, with Jixing New Energy soaring over 343% and Baikin Oil Services rising over 79% [2][10]. - Precious metals became a safe haven, with China Silver Group rising 12.5%, followed by Tongguan Gold and Lingbao Gold, which also saw gains [11][12]. Sector Analysis - The energy sector, particularly oil and gas producers, showed strong performance, while real estate developers and financial services faced declines [3]. - Biopharmaceutical stocks were active, with Ascenta Pharmaceuticals rising over 12% and Kintor Pharmaceutical up over 11% [13]. - The steel sector faced downward pressure, with stocks like Aowei Holdings and Meiya Holdings dropping over 4% [9]. Individual Stock Movements - Beijing Construction saw a significant increase of 220% after a privatization proposal was announced, with a cash offer of HKD 0.14 per share, representing a 2.5 times premium over the last trading price [14][15]. - Southbound funds recorded a net inflow of HKD 12.42 billion, indicating continued interest in Hong Kong stocks despite the overall market decline [17]. Future Outlook - According to recent reports, the Chinese market has seen a net inflow of USD 5.2 billion from the beginning of the year until May, but foreign investment remains significantly underweight in Chinese equities. The Hang Seng Index is currently at a valuation that is approximately 60% of its historical average over the past seven years, suggesting potential for future growth [19].