Hong Kong stocks ended their losing streak and rose on Tuesday, led by AI-related firms, while investors clung to the hope of trade talks curbing a potential trade war between the two largest economies in the world.

The Hang Seng Index surged 2.83%, or 572.70 points, to close the day at 20,789.96. The Hang Seng China Enterprises Index added 3.51%, or 259.52 points, to 7,643.63.

A 10% duty from the US on Chinese goods was implemented Tuesday, despite indications of potential negotiations by Donald Trump, president of the US, an SCMP report stated.

China retaliated by announcing its intention to put a 10% to 15% tariff in place starting Feb. 10 on various US products including coal, LNG, oil, and agricultural equipment.

At the same time, the US has delayed imposing tariffs on Mexico and Canada by one month on an agreement for increased vigilance at the borders to restrict the flow of drugs and migrants, according to the report.

Investors are hoping for similar negotiations with China to end the current tariff disputes.

On an uplifting note, Hong Kong's gross domestic product increased 2.4% year over year in the fourth quarter of 2024, higher than the 1.9% growth in Q3 2024, according to advance estimates of the city's census and statistics department.

Hong Kong's total retail sales, on the other hand, fell by 9.7% from the year-ago period to HK$32.8 billion in December 2024, according to a separate report released by the department Monday.

In corporate news, tech and AI firms were the main drivers of the rally, with Alibaba Group (HKG:9988), Tencent (HKG:0700), and Xiaomi (HKG:1810) rising around 4% each, while Meituan (HKG:3690) soared 6%.