Hong Kong stocks’ strong 2026 start loses steam on rising China-Japan tensions
Beijing has banned exports of goods to Japan with potential military use, with the possibility of additional measures
The Hang Seng Index fell 0.9 per cent to 26,458.95 at the close, while the Hang Seng Tech Index dropped 1.5 per cent. On the mainland, the CSI 300 Index dropped 0.3 per cent and the Shanghai Composite Index added 0.1 per cent.
Alibaba Group Holding slumped 3.3 per cent to HK$145.90 and Tencent Holdings lost 1.3 per cent to HK$624.50. Electric-vehicle maker BYD lost 3.9 per cent to HK$95.30 and short-video platform operator Kuaishou Technology sank 2.3 per cent to HK$73.75. PetroChina declined 2.9 per cent to HK$8.02 and CNOOC shed 3 per cent to HK$20.66.
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Beijing was also mulling tightening export reviews for some rare earth-related items, the state-run China Daily reported.
The episode clouded the strong momentum in Hong Kong stocks – a rally that has carried over from last year as investors shifted to Chinese technology companies in search of alternatives to richly valued US peers. The Hang Seng Index had risen 4.2 per cent since the start of 2026 up to Tuesday.