Hong Kong stocks pull back from 4-month high as DeepSeek-fuelled frenzy takes a pause

Hang Seng Tech Index gives up gains of as much as 4.2 per cent to end 0.9 per cent lower; Alibaba maintains momentum

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Hong Kong’s stock market is currently in the midst of a steaming rally. Photo: Dickson Lee

Published: 10:56am, 13 Feb 2025Updated: 5:32pm, 13 Feb 2025

Hong Kong stocks retreated from a four-month high on Thursday after a rally that sent a key gauge of Chinese technology stocks into a bull market took a breather, as investors pared bets because of the Federal Reserve’s hawkish interest-rate outlook.

The Hang Seng Index fell 0.2 per cent to 21,814.37 at the close. The Hang Seng Tech Index, which has benefited from most of the gains driven by the DeepSeek frenzy, lost 0.9 per cent. It reversed a gain of as much as 4.2 per cent, which briefly lifted the gauge past a September high after China announced a broad rescue package to prop up the stock and property markets.

On the mainland, the CSI 300 Index and the Shanghai Composite Index both slipped 0.4 per cent.

Smartphone maker Xiaomi and personal computer maker Lenovo Group led losses among tech names, losing at least 5 per cent. Chipmaker Semiconductor Manufacturing International Corp (SMIC) also fell after Bocom International downgraded the stock to neutral. Alibaba Group Holding maintained momentum, extending its biggest gain in more than two years.

Federal Reserve chair Jerome Powell told lawmakers on Wednesday about the Fed’s continuing efforts to tame inflation. Photo: Getty Images via AFP

“In the near term, the re-rating process has been fully priced in,” said Zhang Jiqiang, an analyst at Huatai Securities in Beijing. “The rebound may have started to take a pause now.”