Hong Kong stocks rallied on Friday, buoyed by renewed investor enthusiasm for Chinese mainland technology companies following recent advancements in artificial intelligence.
Analysts suggest that the tech sector could propel the city’s benchmark Hang Seng Index to hit last year’s peak, although they caution that traditional sectors should not be overlooked for long-term growth.
The HSI surged 3.69 percent, or 805 points, closing at 22,620.33. The Hang Seng Tech Index, which tracks 30 tech-focused companies, jumped 5.56 percent, while the Hang Seng China Enterprises Index, reflecting the overall performance of Chinese mainland firms listed in Hong Kong, advanced 4.11 percent.
Most sectors, including internet, healthcare, and automotive, posted gains. This contributed to a market turnover exceeding HK$364.6 billion ($46.8 billion), the second consecutive day above the HK$360 billion threshold.
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The surge has driven the benchmark index up by 6.58 percent, or 1,396.72 points, during this trading week, marking five consecutive weeks of gains.
Kenny Ng, a securities strategist at China Everbright Securities International Co, said the rally was mainly driven by the tech sector, in particular the ongoing impact of DeepSeek, China’s home-grown AI development firm. “The influence of this company has been extending to sectors like pharmaceuticals and telecommunications,” he added.
In the past five trading days, for instance, stocks of the country’s three major telecom operators — China Mobile, China Telecom, and China Unicom — rose 5.06 percent, 13.29 percent and 7.71 percent, respectively, after they announced that they have integrated DeepSeek’s AI model.
“The technology achievements and commercial potential of DeepSeek, as well as its cost-effective development capabilities, have shown China’s innovation in emerging technologies, encouraging global investors to reassess the value of Chinese tech stocks,” said Alvin Ngan, an equity strategist of Zhongtai Financial International Ltd.
Noting that OpenAI’s chatbot ChatGPT has been an important driving force of the US stock market since its launch in late 2022, Ngan commented that the recent revaluation driven by DeepSeek is a beginning, and he anticipates that with more related applications being rolled out, Hong Kong’s stock market will gain a longer-term boost.
Ngan said he expects that the HSI could reclaim last year’s peak of around 23,200 points.
Hong Kong-based stock commentator Conita Hung concurred with Ngan, and described DeepSeek as an “unexpected but significant” market force. She said financial institutions will revise their expectations for Hong Kong stocks upward due to its influence.
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But Hung cautioned that DeepSeek’s ability to boost confidence has not yet been seen in traditional sectors, such as consumer goods and real estate. The performance of the HSI, which heavily relies on these sectors, will still be closely related to overall economic improvements and macroeconomic policies.
Ngan said next month will be an important period for Hong Kong stocks, as investors await strong economic support measures expected to be announced at the “two sessions”, or the annual gatherings of the National People’s Congress, the country’s top legislature, and the National Committee of the Chinese People’s Political Consultative Conference, the country’s top political advisory body.
Moreover, many listed companies will report earnings in March, showing whether profits meet investor expectations, he added.
Contact the writer at irisli@chinadailyhk.com