Hong Kong, February 3, 2026, 17:04 (HKT)
Hong Kong shares ended Tuesday slightly higher, buoyed by gains in banks that offset a late pullback in major tech stocks. The Hang Seng Index rose 0.2% to 26,834. The Hang Seng Tech Index dropped 1.1%, with HSBC Holdings climbing 3.1% while Tencent slid 2.9%, according to AAStocks data.
The subdued close followed a 2.2% drop in the Hang Seng Index to 26,775.57, marking its sharpest single-day decline since Nov. 21. Miners and telecom stocks weighed heavily, dragging down sentiment as risk appetite waned, according to the South China Morning Post.
A TradingView report highlighted bargain hunting following the market’s retreat from a 4-1/2-year peak. Metals and cryptocurrencies showed steadier trading, while Wall Street gained ground. The report also urged caution ahead of Hong Kong’s retail sales figures and China’s planned hike in value-added tax (VAT) on telecom services — a consumption tax that directly impacts profit margins.
Hong Kong’s Census and Statistics Department reported that retail sales value increased 6.6% in December, reaching $35.0 billion. Online sales surged 30.9% to $3.1 billion. A government spokesman said sales “continued to recover” in December, citing rising visitor numbers and strong economic momentum as key factors. info.gov.hk
The Hang Seng Index jumped 0.82% at the open to hit 26,995, boosted by financial stocks, according to Dim Sum Daily. AIA Group climbed 1.5%, Ping An Insurance advanced 1.8%, Alibaba rose 1.2%, while Xiaomi dipped 0.6%.
By midday, the benchmark trimmed its advance to just 0.2%, while the Hang Seng Tech Index slipped 1.3%, AAStocks reported. Tencent dropped 2.9%, Kuaishou fell 4.6%. Banks fared better—HSBC was still up 2.8% at that time.
China’s factory data added some support. The RatingDog China General Manufacturing purchasing managers’ index (PMI) — where readings above 50 indicate expansion — ticked up to 50.3 in January from 50.1 in December, marking its best level since October, according to a private survey by S&P Global. “If cost pressures persist while demand recovery is limited, profit margins will remain under pressure,” warned Yao Yu, founder of RatingDog. Reuters
Tax concerns lingered. Mobile World Live reported that China’s Ministry of Finance and State Taxation Administration will reclassify certain telecom services, pushing the tax rate up to 9% from 6%, starting in 2026 on mobile data, messaging, and broadband access. China Mobile, China Telecom, and China Unicom cautioned this move could dent revenue and profits unless they hike prices or revise service bundles.
After last week’s sharp moves in gold and silver rattled broader risk assets, some investors remain wary. “It will take a long time for them to rebuild a bull or bear position…so they are staying away from the market,” said Steven Leung, director of institutional sales at UOB Kay Hian in Hong Kong. His broader markets note also highlighted a rebound in Japan’s Nikkei. Reuters
The bounce remains fragile. A drop in metals or the telecom tax shift weighing on earnings forecasts for major internet firms could erase Tuesday’s modest gains in the Hang Seng fast — a move that seems minor until it snowballs.
Hong Kong remains caught between a bank-driven rally and a tech slump, while China’s data and policy news dominate the headlines.
