New Year rally in Hong Kong stocks recedes as investors brace for China data

The Hang Seng Index fell 1.2 per cent to 26,136.72 at the noon break, adding to a 0.9 per cent decline the previous day. The Hang Seng Tech Index dropped 1.1 per cent.

On the mainland, the CSI 300 Index slipped 0.5 per cent and the Shanghai Composite Index was little changed.

Personal computer maker Lenovo Group slumped 5.4 per cent to HK$8.80, and search engine operator Baidu slid 3.5 per cent to HK$140. Alibaba Group Holding retreated 1.5 per cent to HK$143.70, and Tencent Holdings shed 1.7 per cent to HK$614. On the plus side, Semiconductor Manufacturing International advanced 2.2 per cent to HK$76.35 after Morgan Stanley said that demand for the company’s chips would remain robust.

The gain in stocks that extended from a bull run in 2025 showed signs of fatigue, as the lack of fresh catalysts prompted investors to hold off on further bets. The Hang Seng Index had risen 4.2 per cent through Tuesday this year as diversification away from high-flying US tech stocks fuelled migration to Chinese peers.

A slew of coming China economic data will test the sustainability of the rally, with traders needing more conviction from the fundamentals front after little room was left for further valuation expansion.