Hong Kong stocks suddenly drop! Tencent Holdings once fell over 6%, the Hang Seng Tech Index rapidly declined. What happened?

On the morning of February 3rd, the Hong Kong stock market experienced a rapid decline. Tencent Holdings (HK00700) once fell more than 6%, hitting a new low since mid-August last year. Tencent’s decline also dragged down the entire tech and internet sector in Hong Kong, with the Hang Seng Tech Index dropping over 3% in early trading.

This morning, Tencent’s stock opened flat but then continued downward, with the lowest price reaching HKD 561 at the time of writing, a maximum decline of 6.27%.

What exactly triggered Tencent Holdings’ sudden drop?

Some analysts believe it may be related to the overall market environment’s recent weakness. As risk appetite decreases, it has led to a collective weakening of tech and internet stocks. Additionally, regarding Tencent itself, the company is expected to release its annual report on March 18, so since January 18, the company has been in a buyback silence period. Therefore, Tencent has suspended buybacks since January 16.

Tencent’s current buyback program has been ongoing since the end of the buyback silence period following the Q3 2025 report on November 18, with a total of 42 buybacks, totaling HKD 26.063 billion, and approximately 42.49 million shares repurchased. The buyback price range has mainly been between HKD 590 and HKD 630, with an average buyback price of about HKD 613.4 per share. The last buyback was on January 16, 2026, when 1.017 million shares were repurchased at prices between HKD 590 and HKD 600, costing HKD 636 million.

Tencent’s continuous buybacks have always been an important support for the company’s stock price. The recent pause in buybacks has temporarily removed this key buying force. Coupled with increased market selling pressure, this has triggered a short-term decline in the stock price.

Regarding major companies, Kuaishou-W (HK01024) and Baidu Group-SW (HK09888) fell over 6%, Bilibili dropped more than 5%, and Alibaba declined over 4%. For the future of Hong Kong tech and internet stocks, Dongwu Securities believes that the trend of the Hang Seng Tech Index may still be driven by three main factors: macroeconomic data, policy pricing, and earnings verification. Among these, overseas inflation and employment data that determine the Federal Reserve’s interest rate expectations are key factors affecting the valuation elasticity of Hong Kong tech stocks; domestic price and interest rate signals mainly provide the basis for judging “policy space and recovery slope”; while the earnings season will shift the market focus from theme-driven to actual profit and cash flow realization.

Therefore, regarding the short-term fluctuations of the Hang Seng Tech Index, institutions believe that investors should remain calm. In the medium term, driven by the “spring rally,” there are opportunities for phased recovery. However, if Woshou becomes the Federal Reserve Chair and implements hawkish policies, the market is more likely to show increased volatility and structural divergence rather than a unidirectional trend.

(Source: Daily Economic News)