Hong Kong stocks retreated as a two-day rally in Chinese tech companies prompted traders to lock in gains while the market awaited more earnings reports from industry leaders. The Hang Seng Index slipped 0.1 per cent to 25,693.95 at the close of trading on Wednesday, reversing an earlier rally of as much as 1 per cent. Anta Sports sank 6.8 per cent after the Chinese sportswear maker signalled a slowdown in sales momentum. The Shanghai Composite Index added 0.7 per cent. The Hang Seng Tech Index surrendered a 3.5 per cent intraday gain to end with a 0.2 per cent gain. The three-day advance was the index’s longest winning stretch in six weeks. Meituan added 2.3 per cent after earlier gaining as much as 6.3 per cent. Tencent Holdings slipped 0.6 per cent, reversing a 4.2 per cent advance and Alibaba Group Holding, the owner of the newspaper, lost 1.4 per cent. Caution prevailed after the local market clawed its way out of bear territory amid bargain hunting and technical support, even though China’s top policymakers have not signalled an end to the regulatory crackdown that wiped out more than US$1 trillion of value in recent weeks. “Investors should take a defensive strategy, given that market sentiment is fragile,” said Shen Yandong, an analyst at Wanhe Securities. “In the short term, the market will continue to be rattled by policies as well as economic growth momentum and liquidity issues.” Some investors see long-term value in Chinese tech stocks. Ark Investment Management’s Cathie Wood said she is more optimistic than pessimistic about China in the long term, adding that the crackdown was not meant to stymie growth and progress, Bloomberg reported. Corporate earnings reports may test the strength of this week’s market rebound. Eight companies on the Hang Seng Index including Xiaomi will release their second-quarter results on Wednesday. Kuaishou Technology, the worst-performer among mega listings in the city this year, retreated 3.6 per cent to HK$77.50, bringing the slump to 74 per cent since its February 5 debut. Losses at the short-video platform operator widened to 7.04 billion yuan (US$1.09 billion), it said after the market closed. Elsewhere, New Oriental Education and Technology Group, the after-school tutoring firm, surged 13 per cent to HK$15.48 in Hong Kong, the biggest gain since June 10. China Telecom slid 2.4 per cent to 4.83 yuan in Shanghai, adding to a 10 per cent maximum slump in each of the past two days, on concern that the hefty premium over its Hong Kong-traded shares is unsustainable. Its shares closed at HK$2.81 (2.34 yuan) in Hong Kong.