HONG KONG: Hong Kong equities retreated from recent highs on Monday, while Chinese stocks ended slightly higher as investors started to pocket gains from a tech-driven rally while digesting news from President Xi Jinping’s meeting with private entrepreneurs.
At the close of trade, the Hang Seng index was off a mere 4.10 points, or 0.02% at 22,616.23. It scaled 23,000 in early trade to hit a fresh year-to-date high, just shy of its previous peak reached in October 2024.
“As the index approaches last year’s high, some investors who bought at the peak in October 2024 might take profits,” said Richard Tang, China Strategist at Julius Baer.
Hang Seng Tech lost steam after reaching a three-year high and ended 0.5% lower.
Xi held a rare meeting on Monday with some top tech companies, including Alibaba, Tencent and Huawei, in what sources previously billed as an effort to boost private-business sentiment.
Tech stocks saw growing divergence. Baidu sank 7%, the most on the Hang Seng index, after none of its top executives attended the meeting.
However, artificial intelligence- and robotics-related stocks in A-share gained, driving the Shanghai Composite index up 0.27% to end at 3,355.83.
The blue-chip CSI300 index was up 0.21%.
Goldman Sachs said it expects the index to jump 19% in the next 12 months. However, others warned of short-term over-shoot optimism following DeepSeek’s breakthrough.
“We caution that China market may still face short-term negative catalysts from policy disappointment, geopolitical tensions and weak macro data/earnings,” BofA Securities said.
Jon Withaar, head of Asia Special Situations at Pictet Asset Management, said he expects more volatility and the market to pull back in the short term given the extreme bullishness.
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