Today (February 3rd), the Hong Kong stock market experienced significant turbulence. During the session, the Hang Seng Index fell by over 1% at one point before staging a slight rebound to close higher. The Hang Seng Tech Index dropped by more than 3% intraday, but saw its losses narrow considerably by the market close. By the close, the Hang Seng Index was at 26834.77 points, up 59.20 points or 0.22%.
The Hang Seng Tech Index closed at 5467.26 points, down 59.05 points or 1.07%.
A piece of market speculation triggered the sharp fluctuations in Hong Kong stocks today. The rumor suggested that the financial industry and value-added internet services (such as in-game purchases and advertising) might face risks from an increase in the value-added tax (VAT) rate, drawing an analogy to the high tax rates on baijiu. This news specifically caused Tencent Holdings (HK00700) to fall over 6% at one point during the session, ultimately closing down 2.92%.
Addressing this rumor, a brokerage institution stated that the claim "game tax rates moving closer to baijiu's 32%" is misleading. The 32% for baijiu refers to consumption tax (20% ad valorem tax + 0.5 RMB/500g specific tax), whereas in-game purchases and advertising services are subject to VAT; the two tax types, their underlying taxation logic, and legal basis are entirely different, making any "convergence" impossible. The institution further indicated that this rumor represents typical market noise, likely stemming from an over-interpretation and miscommunication of a single policy document, amplified during a period of fragile sentiment. Future tax normalization is more likely to involve audits and reviews of certain companies' eligibility for tax incentives (such as high-tech enterprise status) rather than a direct increase in statutory tax rates. The impact of such measures would be limited and controllable. Regarding the aforementioned rumor, the institution believes its credibility is extremely low and advises against excessive concern. The core drivers for leading internet company share prices remain their own business growth, the progress of AI commercialization, and improved profitability; short-term sentiment-driven disturbances do not alter the long-term investment thesis. Furthermore, gold stocks staged a rebound in the afternoon session. Among them, Zijin Mining International (HK02259) rose over 7%, China Molybdenum Co., Ltd. (HK03993) gained over 6%, while Jiangxi Copper Company Limited, Zijin Mining Group Company Limited, and Shandong Gold Mining Co., Ltd. all advanced more than 4%.
Following a "stampede-like" plunge, the precious metals market showed initial signs of stabilization today. Spot gold reclaimed the $4900 per ounce level, and spot silver climbed back above $86. China Post Securities believes that, in the long term, the process of de-dollarization will not reverse course; this adjustment does not signal the end of the bull market for precious metals, and investors should patiently await the turning point in prices. In other sectors, technology stocks were broadly lower, with Kuaishou Technology down over 4%, Baidu, Inc. declining over 3%, Bilibili Inc. falling over 2%, and Alibaba Group Holding Ltd. dropping over 1%. Commercial aerospace concept stocks generally rose, with APT Satellite Holdings Ltd. surging over 11%. In the IPO space, Dongpeng Beverages saw its Hong Kong shares rise over 1% on their first trading day. On the capital flow front, southbound capital continued its small-scale net buying of Hong Kong stocks. By the close, net southbound buying exceeded HK$9 billion.
Looking ahead: Guoyuan International believes that Donald Trump's nomination of Kevin Warsh for the next Federal Reserve Chairman, given his hawkish stance and policy proposition of "proceeding with interest rate cuts and balance sheet reduction simultaneously," could spark market concerns about a shift in the Fed's policy framework. This contributed to last Friday's decline in commodity prices, particularly silver's single-day plunge of 26%. Influenced by the Warsh nomination, risk appetite in the Hong Kong market has turned cautious, especially putting valuation adjustment pressure on the previously strong non-ferrous metals sector. However, overall valuations have not yet fully priced in the domestic economic recovery, suggesting medium- to long-term resilience remains. CITIC Securities stated that earnings expectations for Hong Kong stocks have already undergone significant adjustment, and coupled with the fact that disturbances from both internal and external liquidity factors have largely subsided, the institution judges that the spring rally in Hong Kong stocks observed since late December 2025 may continue. The overall trend is expected to be "large-cap stocks showing relative outperformance before the Spring Festival, with growth industries supported by policy directions performing even better." Post-Spring Festival, attention should be paid to the potential impact of the next peak period for share lock-up expiries on Hong Kong market liquidity expectations.
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