Hong Kong stocks advanced on optimism there is more room for upside in the market on the back of China’s reopening while the ChatGPT concept drove further gains in tech stocks. The Hang Seng Index jumped 1.6 per cent to 21,624.36 at the close of Thursday trading, snapping a two-day slide for the best gain in two weeks. The Tech Index added 3.2 per cent, while the Shanghai Composite Index climbed 1.2 per cent. Alibaba Group jumped 4 per cent to HK$107.60 after the company said it was testing a ChatGPT-style chatbot, joining a growing bandwagon. Tencent added 3.5 per cent to HK$395.60, and smartphone maker Xiaomi surged 8.5 per cent to HK$13.52. Developer Longfor Group gained 3 per cent to HK$25.70, and casino operator Sands China jumped 5.3 per cent to HK$29.50. “China’s ongoing reopening [will] provide boosts to global growth, inflation, and China-exposed assets,” Goldman Sachs analysts including Kinger Lau said in a note on Wednesday. There is more upside for China equities from here even after the recent sharp rally, they added. China’s economic reopening is well under way and policies are aligned to boost growth, analysts at Morgan Stanley said on Wednesday. The supportive business environment is likely to continue to prevail as policymakers will prop up the economy to maintain social stability, they added. Traders chase ChatGPT-driven stocks from Baidu to Zhihu amid state warning The Hang Seng Index appreciated as much as 55 per cent from a low in late October after China abandoned its zero-Covid policy, before losing some momentum this month. The city’s benchmark index has retreated 4.7 per cent since peaking on January 27, which some Wall Street analysts see as a buying opportunity. Caution prevailed as some rate traders bet the Fed terminal rate would rise as high as 6 per cent in 2023, according to Bloomberg, versus the consensus dot-plot of 5.125 per cent among Fed participants. The US central bank downshifted this month by raising the Fed funds rate 25 basis points to a range of 4.50 to 4.75 per cent. Stocks face ‘tortuous’ recovery as Hang Seng rally unravels amid fund outflows The Nasdaq Composite fell 1.7 per cent in New York overnight, abetted by a sell-off in Alphabet, the owner of Google. The jitters infected local stocks that had rallied this week on the ChatGPT-linked craze. Zhihu slumped 9.9 per cent to HK$29.25, while Baidu slipped 3.7 per cent to HK$151.60. The Shanghai Stock Exchange on Wednesday issued queries to Beijing Haitian Ruisheng and CloudWalk Technology, whose shares have surged amid the ChatGPT hype. The two companies slipped 2.5 per cent and 9.2 per cent on Thursday, respectively. Two stocks debuted in Shenzhen. Hunan Yuneng New Energy surged 125.5 per cent to 53.60 yuan, while materials supplier Shanghai Allied Industrial jumped 120 per cent to 54.78 yuan. Asian stocks retreated on the Fed’s hawkish outlook. The Kospi in South Korea and the Nikkei 225 index in Japan lost 0.1 per cent, while the S&P ASX 200 index in Australia dropped 0.5 per cent.