Hang Seng Tech Index Starts the Year on a Downward Trend, Blame ByteDance?

The three major indices closed in the green on the first day of the Year of the Horse in the A-shares market, but today the Hang Seng Tech Index once fell nearly 2.69%, closing down 2.13%, erasing all gains made during the Year of the Horse (up 1.8%). From the high point on October 2, 2025, the Hang Seng Tech Index has now retraced nearly 20%.

Why has the Hang Seng Tech Index continued to decline? Currently, there are several mainstream views:

1. External liquidity tightening. On January 30, 2026, U.S. President Trump announced the nomination of Kevin Warsh as the next Federal Reserve Chair. Warsh is a typical hawk on inflation, emphasizing the Fed’s “independence” and a strong dollar. His support for balance sheet reduction has sparked concerns over global liquidity tightening.

2. Increased internal competition raising performance concerns. Competition from “food delivery wars,” “red envelope battles,” and others has led to profit declines for companies like Meituan and Alibaba, intensifying market worries about the performance of internet giants. Previously, Meituan issued a profit warning expecting a net loss of about 23.3 to 24.3 billion yuan in 2025, contrasting sharply with the net profit of 35.808 billion yuan in 2024, marking a nearly 60 billion yuan turnaround.

3. The rise of new AI forces has increased pressure on Hang Seng Tech’s heavyweight stocks. Domestic AI newcomers (such as ByteDance Seedance 2.0, Zhipu, MiniMax) are rapidly emerging, creating positive competition for Hang Seng Tech’s key stocks, with market concerns about the aging of traditional internet platforms.

According to data from Eastmoney Choice, the top ten heavyweight stocks in the Hang Seng Tech Index account for 70% of the index, indicating high concentration. External liquidity tightening and multiple competitive pressures have amplified the stock price volatility of heavyweight stocks like Alibaba and Tencent, thereby impacting the Hang Seng Index. Data shows that since October last year, Alibaba has fallen 16.38%, Meituan down 22.11%, and Tencent down 21.57%.

Additionally, Anthropic’s AI product Claude has sparked market concerns about SaaS business models being disrupted by AI, with Claude “beating up” sectors like U.S. software, internet, media, and cybersecurity. Similarly, domestic ByteDance directly competes with six of the top ten Hang Seng Tech stocks, which together account for 40% of the index weight. These six are Alibaba, Meituan, Tencent, Kuaishou, JD.com, and Baidu, with competition spanning e-commerce, cloud, AI, local services, short videos, and search.

(Source: Eastmoney Research Center)