HONG KONG: Hong Kong stocks rallied to a three-year high on Tuesday, led by gains in tech shares, while investor sentiment was bolstered by China’s fresh stimulus and improving economic data.
The Hang Seng Index closed up 2.5% at 24,740.57, its highest level since February 2022. The Hang Seng Tech Index advanced 4%.
Baidu surged 12.2% to the highest since October, as investors continued to scoop up its shares following the launch of two new artificial intelligence models. Alibaba climbed 5.8% and Tencent gained 3.2%.
On the mainland, China’s blue-chip CSI 300 index climbed 0.3%, while the Shanghai Composite index edged up 0.1% to a three-month high.
The Hang Seng Index has surged over 23% this year, ranking it as the best performer among major global indexes, as investors increasingly see the beaten-down markets as a shelter amid a faltering US exceptionalism.
Improving consumption data and fresh stimulus to boost domestic spending have helped alleviate concerns about economic fundamentals despite US tariff risks, emboldening investors to chase the rally.
“We believe there is further room for a re-rating and even a premium to emerging markets could be justified,” HSBC analysts said in a note.
There is a rotation from AI to quality growth sectors, and “old-economy” sectors may eventually benefit, they added.
The Hang Seng rally has also narrowed the discount between Hong Kong shares and their onshore peers, with the Hang Seng Stock Connect China A/H Premium Index dipping to the lowest level since 2020.
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