The Hang Seng closed nearly flat at 26,347 on Monday, reversing early gains as traders took profits after the index hit a six-week high Friday due to optimism toward China’s tech sector. Sentiment turned cautious after a private survey showed services activity in China rose the least in six months for December, and investors largely shrugged off a rally in mainland stocks on their first trading day of 2026. Focus shifted to China's upcoming December CPI and PPI data, after November’s annual inflation hit a 21-month high of 0.7%, while core inflation stayed at a 20-month peak of 1.2%. However, producer prices fell more than expected, declining for the 38th month. Globally, geopolitical risks intensified after U.S. military action in Venezuela over the weekend. All sectors in the Hong Kong markets were relatively subdued. Gains in Kuaishou Tech (11.0%), China Resources Land (5.0%), and SMIC (1.6%) almost offset declines in Xiaomi (-2.7%), China Hongqiao (-2.4%), and Zijin Mining (-2.2%).