SHANGHAI: China and Hong Kong stocks rose on Friday and were set to end the week higher, led by a strong performance in AI shares as home-grown startup DeepSeek’s success boosted investor sentiment.
HK-listed Chinese stocks hit 3-month high
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China’s blue-chip CSI300 Index climbed 1.7% by the lunch break, while the Shanghai Composite Index gained 1.3%. Hong Kong benchmark Hang Seng added 1.5%.
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The Hang Seng Index soared 4.9% so far this week, on track to log the best performance in four months, while the CSI 300 Index has risen 2.4%.
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“DeepSeek a re-rating catalyst. The development of DeepSeek has attracted the attention of global markets - it reconfirmed China’s continued ability to innovate,” HSBC analysts said.
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Gao Zhe, portfolio manager of Harfor Fund Management Co, said, “In 2025, China’s AI industry is likely to enter a flourishing period, accelerating prosperity investments with more emphasis on the development of applications.”
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The CSI AI index was up 4.6%, taking its gains to more than 10% for the shortened post-holiday week. ** Tech major listed in Hong Kong were up 2.8%.
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“We think 2025 is the year the investing world realises China is out-competing the rest of the world,” said Peter Milliken, research analyst at Deutsche Bank.
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Milliken sees China’s valuation discount disappearing and said that profitability can surprise to the upside through the economic cycle due to policy swings aimed at boosting consumption and from financial liberalisation.
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Real estate stocks also surged, up 3.7%, led by Vanke, which jumped 6.7%, as investors gained confidence following management changes at the property major.
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