Hong Kong’s benchmark Hang Seng Index gave up early gains to close down 0.2 percent at 21,814 on Thursday.
The Hang Seng Index opened at 21,959 and hit an intraday high of 22,524 before retreating.
The Hang Seng Tech Index, which tracks Chinese technology enterprises listed in Hong Kong, fell 0.87 percent to 5,235. The Hang Seng China Enterprises Index declined 0.69 percent to 8,003.
Chinese real estate developer Sunac China Holdings led the decline, plunging 8.37 percent, followed by telecoms firm ZTE Corp dropping 8.26 percent, while Shanghai Fudan Microelectronics Group and BYD Electronic (International) Co
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However, interactive media stocks bucked the broader market decline, led by Kuaishou Technology surging over 6 percent. Baidu added 5.74 percent, while Bilibili gained 5.65 percent.
The e-commerce sector also posted gains, with e-commerce services provider Baozun advancing 3.23 percent. Industry peers Meituan and Alibaba followed suit, rising 2.9 percent and 2.55 percent respectively.
Raymond Ma, chief investment officer of Chinese mainland and Hong Kong at Invescom, said, “Application of DeepSeek will further boost business like e-commerce, cloud services, AI smartphone, AI laptop, consumer electronics, semi-conductor and auto.”
China Galaxy Securities’ analysts warned in a report that under the pressure of US tariff hikes potentially reducing investor risk appetite and the US Federal Reserve’s slower pace of interest rate cuts, Hong Kong stocks face liquidity constraints.
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In the medium to long term, the market’s performance will still depend on fundamentals, they said. “With the development of new quality productive forces and the implementation of domestic consumption stimulus policies, Hong Kong-listed Chinese companies are expected to see steady profit growth.”