Why did the Hang Seng Index drop below 27,000 today?

The index fell 2.2% to 26,775 as investors priced a hawkish Federal Reserve chair nominee, lifting yields and the dollar. A commodity selloff hit miners and cyclicals, while China’s plan to raise telecom VAT added sector pressure. Turnover spiked, showing active de-risking, even as Southbound flows stayed net positive.

How does the China telecom VAT change affect telcos and tech?

Raising VAT from 6% to 9% can compress margins if telcos cannot pass costs to users. Enterprises may delay projects or renegotiate contracts. That can ripple into towers, equipment, cloud, and data services, softening capex plans. Investors will watch pricing power, churn, and service mix to gauge earnings impact.

Do Southbound inflows offset global risk-off pressures?

Southbound buying offers support for select large caps and signals mainland interest on weakness. However, it may not fully offset global rate and currency pressures that drive index-level swings. Use flows as a confirming signal, not a sole trigger. Breadth, volatility, and sector guidance should also inform position sizing.

What price levels are important after today’s close?

After the break, 27,000 is immediate resistance. A sustained move above it could steady momentum. On the downside, watch 26,600 to 26,500 for initial support, then 26,200 if selling continues. Let breadth, turnover, and Southbound direction confirm any rebound before adding risk aggressively.

How should I position after the commodity selloff?

Consider a selective barbell. Hold cash-generative defensives and add growth only where catalysts are clear. For miners, track metal prices and hedging. For telcos, assess pricing power and pass-through ability. Use staggered entries, stop-losses, and maintain liquidity to manage volatility while the market searches for a base.

Global Market Insights

Hang Seng Index Today, February 03: Slides Below 27,000 on Fed Pick, VAT Shock

ByHuzaifa Zahoor February 3, 2026February 3, 2026

The Hang Seng Index today fell 2.2% to 26,775, breaking below 27,000 as Hong Kong stocks faced global rate jitters and a commodity selloff. Investors priced a hawkish Federal Reserve chair nominee, pushing yields higher and pressuring risk assets. China’s move to lift VAT on telecom services from 6% to 9% weighed on mainland telcos and related plays. Turnover surged to HK$347.9 billion, while Southbound flows stayed net positive, indicating selective dip buying. With sentiment fragile and policy headlines in focus, we outline the drivers, levels to watch, and practical steps for local portfolios.