Published: 10:47, July 16, 2025 | Updated: 13:40, July 16, 2025
Hang Seng’s stellar run takes it toward highest level in 3 years
By Agencies

People walk past the Exchange Square, which houses the Hong Kong Stock Exchange, in Central, Hong Kong, April 8, 2025. (ANDY CHONG / CHINA DAILY)

The Hong Kong Special Administrative Region’s equity benchmark is trading near its highest level in over three years, thanks to a rally sparked by a breakthrough in artificial intelligence earlier in the year as well as strong demand from Chinese mainland investors.

The Hang Seng Index advanced as much as 1.1 percent on Wednesday before trimming gains. It was still on track for a fifth straight session of gains. Alibaba Group Holding Ltd and Tencent Holdings Ltd were among the top contributors. Another closely watched gauge, the Hang Seng China Enterprises Index, also jumped as much as 1.3 percent.

ALSO READ: Chan: Hong Kong stands out as a safe harbor for global capital

Tech stocks have been at the forefront of the HSI rally, driven by optimism over mainland startup DeepSeek’s breakthrough in artificial intelligence and government support for AI development and other private sectors.

Investor sentiment has also improved as geopolitical tensions between the world’s two biggest economies begin to ease. Nvidia Corp’s and Advanced Micro Devices Inc’s plans to resume sales of some AI chips to the mainland reinforced the perception that trade relations are thawing.

“With the best Chinese tech firms listed in Hong Kong, this has injected significant momentum into the HSI since January,” Aidan Yao, Asia senior investment strategist at Amundi SA, said. “Valuations of Hong Kong-listed companies are reasonable, and global investors — mostly still underweight — may be enticed back as the bullish trend continues.”

The Hang Seng Tech Index, which tracks 30 largest tech companies listed in Hong Kong, rose as much as 1.8 percent Wednesday.

Stocks in the Hong Kong SAR will lead onshore peers for now as investors focus on the mainland’s efforts to revive demand, diversify supply chains and technological advancements, Ecaterina Bigos, chief investment officer for Asia ex Japan at AXA Investment Managers, said in a Bloomberg TV interview.

The SAR’s benchmark is among the top-performing major indexes in Asia, up 23 percent year-to-date. Daily turnover hit a record high in April, with the average so far this year nearly doubling that of 2024.

Goldman Sachs Group Inc earlier this month upgraded Hong Kong stocks to market-weight, citing their potential to benefit from a weakening dollar and the Federal Reserve’s easing cycle.