Market Downtrend: The HSI fell 161 points (0.6%) to 25,997, dropping below the 26,000 mark, with significant declines in consumer and gold jewelry stocks.

Consumer Stocks Performance: POP MART and MIXUE GROUP saw notable declines, with POP MART hitting a five-month low, while short selling activity was high for both companies.

Gold Jewelry Sector Impact: The cancellation of tax incentives for gold purchases in China led to a downturn in gold jewelry stocks, with several companies, including LAOPU GOLD and CHOW TAI FOOK, experiencing significant losses.

Gold Miners Struggles: International gold prices continued to decline, negatively affecting gold mining stocks like ZIJIN MINING, which was the worst performer among blue chips, alongside other mining companies facing substantial drops.

Impact of New Gold Tax Policy: A new gold tax policy in China has led to significant declines in gold jewelry stocks, with LAOPU GOLD and CHOW TAI FOOK experiencing drops of over 7% following the announcement.

Details of the Tax Policy: The policy exempts "standard gold" traded on specific exchanges from VAT for on-exchange transactions, but imposes different taxes for physical deliveries based on their intended use, effective from November 1, 2025, to December 31, 2027.

Market Reactions: Spot gold prices fell below USD 4,000 per ounce amid reduced expectations for a Federal Reserve rate cut, contributing to a lackluster performance among gold miners and related stocks.

Short Selling Trends: Several gold mining stocks, including CHINAGOLDINTL and ZIJIN MINING, saw notable short selling activity, reflecting investor skepticism about the sector's performance in light of the new tax policy.

Hong Kong Stock Market Performance: The Hong Kong bourse opened significantly higher, gaining 637 points (2.5%) to reach 25,884, with a slight decline noted in early trading, currently at 25,874 with a turnover of HKD138.135 billion.

Gold and Jewelry Stocks Decline: Major jewelry stocks and gold miners experienced declines, with LAOPU GOLD dropping 6.22% and other companies like LUK FOOK HOLD and CHOW TAI FOOK also seeing losses, attributed to a decrease in spot gold prices from recent highs.

Zijin Mining's Financial Results: Zijin Mining reported a 57% year-on-year increase in net profit for Q3, meeting expectations and prompting Goldman Sachs to maintain a Buy rating while raising the target price for its H shares.

Short Selling Activity: Several gold-related stocks faced significant short selling, with ratios indicating high levels of investor skepticism, particularly for companies like SD GOLD and CHIFENG GOLD, which saw declines of 4.5% to 5.8%.

Market Performance: During the National Day Golden Week holiday, Hong Kong's stock market resumed trading with the HSI starting higher and reaching a four-year high, closing at 27,144, up 288 points or 1.1%.

Tech Stocks Surge: Major tech companies like Tencent, Alibaba, and Baidu saw significant gains, with Tencent hitting a four-and-a-half-year high and Alibaba reaching a four-year high, contributing to the overall market uplift.

Gold Mining Stocks Rise: International gold prices hitting new highs boosted gold mining stocks, with companies like Zijin Mining and Lingbao Gold achieving historical highs in their share prices.

Short Selling Activity: The report highlighted substantial short selling across various stocks, particularly in tech and gold mining sectors, indicating market volatility and investor sentiment.

Gold Price Forecast: Goldman Sachs remains bullish on gold prices, predicting potential increases beyond their initial forecasts of US$4,000 per ounce by mid-2026, driven by strong private investor demand and significant capital inflows into gold ETFs.

Recent Gold Price Trends: Since August 29, gold prices have surged by 12%, surpassing the US$3,200-3,450 range, and currently stand at approximately US$3,863.46 per ounce, indicating a robust market performance.