Hong Kong stocks retreated from a three-year high on Thursday after China stood pat on a key interest rate for a fifth month, offsetting a reassuring tone by the Federal Reserve on the impact of tariffs by the Trump administration and the outlook for monetary policies.

Meanwhile, Trump is drafting an executive order that would rely on funding from a U.S. Trade Representative proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China, Reuters reported.

The Hang Seng Index fell 1.9%, snapping gains of 5.6 per cent over four days. The Hang Seng Tech Index dropped 3%.

In terms of star stocks, Baidu and JD.com fell 5%; Meituan, NIO, and Alibaba fell 4%; Tencent and Bilibili fell 3%; Li Auto and Xiaomi fell 2%; XPeng fell 1%.

Tencent Holdings Ltd. outlined plans to sharply raise spending on AI infrastructure after posting its fastest pace of revenue growth since 2023, showing that China’s most valuable company is intent on keeping pace with rivals in the post-DeepSeek era.

Revenue rose a better-than-projected 11% to 172.5 billion yuan ($23.8 billion) for the three months ended December, while net income almost doubled. The company also unveiled plans to buy back at least HK$80 billion worth of shares and proposed a 32% hike in its annual dividend for 2025. Shares in Prosus NV, a major shareholder, climbed more than 2% in Europe.