Hong Kong Stocks Drop Nearly 2% at Midday, Innovative Drug Index Plunges Over 7%
Claire Weston
The Hang Seng Index dropped 1.98% to 24,514 at the midday break, while the innovative drug index plunged over 7% — the worst-hit major sector — raising the key question for the afternoon: is pharma capital pulling out at scale?
How deep is the midday sell-off?
The Hang Seng closed the morning session at 24,514, down 494 points. The Hang Seng Tech Index fell 4.04%.
Midday turnover hit HK$175.8 billion — volume didn't shrink. This means → sellers dominated; capital left actively, not passively.
The innovative drug index dropped over 7%, far outpacing the broader market's decline.
Why did innovative drug stocks crash so hard?
The sector sold off broadly. At the single-stock level, Joinn Laboratories (06127) fell another 9.9%.
The company issued a risk warning: the vast majority of its net profit came from rising lab-monkey prices, not core business growth. In plain terms = the money came from "monkeys getting more expensive," not from drugmakers actually placing more orders.
This reflects a concentrated market challenge to "profit quality" across the innovative drug sector — headline earnings look fine, but the structure doesn't hold up under scrutiny.
What other sectors are sliding?
Copper stocks fell again: China Nonferrous Mining (01258) dropped 7%, MMG (01208) dropped 6%. U.S. copper tariff policy remains unresolved, and macro uncertainty continues to weigh on copper prices.
Airline stocks extended their decline: JPMorgan expects airline Q2 losses to be the worst in three years, driven by fuel costs. China Eastern Airlines (00670) fell 6%; China Southern Airlines (01055) fell 3.56%.
Lao Pu Gold (06181) dropped over 5% as Middle East tensions stoked inflation fears and gold-price volatility pressured sales.
Which single-stock blowups stand out?
Dobot (02432) fell 13%. At a critical juncture in its "H-share to A-share" process, a co-founder filed complaints alleging the prospectus concealed a major equity dispute. This means → the credibility of the listing itself is now in question.
Johnson Electric (00179) fell over 10%. Q1 revenue rose only about 2% year-on-year; clients remain cautious on procurement. In plain terms = growth has nearly stalled — downstream buyers aren't spending.
XPeng (09868) pulled back over 8%. Its IRON humanoid robot is set to ramp production and serve as an in-store guide. The market, for now, cares more about car sales; the robot narrative hasn't yet converted into orders.
Who bucked the trend?
Quantgroup (02685) surged over 18% after securing a HK$60 million strategic investment from Guofu Quantum to accelerate physical-AI foundation model R&D.
China Merchants China Direct Investments (00133) rose over 5%. Portfolio company Kimi released its latest model, K3, lifting its pre-money valuation to US$31.5 billion.
Heart Medical (02291) gained over 4%, supported by continued buybacks. MeiG Smart (03268) rose over 4% as its on-device AI agent ecosystem matures and the company completes its pivot to smart-module architecture.
What to watch this afternoon?
The innovative drug index lost over 7% in a single session. The core question: is this a cluster of stock-specific negatives resonating within the sector, or the start of a broad pharma capital exit?
If the drug index widens its losses in the afternoon and the sell-off spreads to other pharma sub-sectors, the capital-flight signal strengthens.
Macro headwinds on copper and airlines are unlikely to ease short-term. Watch for U.S. copper tariff developments and oil-price direction.
Content is for reference only, not financial advice.