Hong Kong stocks pull back from 4-month high as DeepSeek-fuelled frenzy takes a pause
Hang Seng Tech Index gives up gains of as much as 4.2 per cent to end 0.9 per cent lower; Alibaba maintains momentum
The Hang Seng Index fell 0.2 per cent to 21,814.37 at the close. The Hang Seng Tech Index, which has benefited from most of the gains driven by the DeepSeek frenzy, lost 0.9 per cent. It reversed a gain of as much as 4.2 per cent, which briefly lifted the gauge past a September high after China announced a broad rescue package to prop up the stock and property markets.
On the mainland, the CSI 300 Index and the Shanghai Composite Index both slipped 0.4 per cent.
Smartphone maker Xiaomi and personal computer maker Lenovo Group led losses among tech names, losing at least 5 per cent. Chipmaker Semiconductor Manufacturing International Corp (SMIC) also fell after Bocom International downgraded the stock to neutral. Alibaba Group Holding maintained momentum, extending its biggest gain in more than two years.
“In the near term, the re-rating process has been fully priced in,” said Zhang Jiqiang, an analyst at Huatai Securities in Beijing. “The rebound may have started to take a pause now.”
The Hang Seng Index had risen 16 per cent from a January low through Wednesday, while the tech gauge surged 25 per cent, as Chinese start-up DeepSeek’s AI model spurred a revaluation of the nation’s biggest tech stocks leading to frenzied buying by investors. The 14-day relative strength index of the tech gauge rose to 72 on Wednesday – a reading above 70 typically signals a correction.