Hong Kong stocks hit 7-week high as investors diversify into Chinese tech names
Investors also boost wagers that Beijing will ramp up policy support to prop up economic growth in 2026
The Hang Seng Index advanced 1.4 per cent to 26,710.45 at the close, the highest level since November 13. The Hang Seng Tech Index jumped 1.5 per cent.
On the mainland, the Shanghai Composite Index climbed 1.5 per cent, closing at the highest since July 2015, while the CSI 300 Index rose 1.6 per cent to a four-year high. The yuan strengthened to 6.9796 against the US dollar, a level not seen since May 2023, boosting the appeal of Chinese assets.
Tencent Holdings, the operator of social-media platform WeChat, gained 1.3 per cent to HK$632.50. Search engine operator Baidu rallied 1.7 per cent to HK$145.90, and game provider NetEase strengthened 3 per cent to HK$229.20. Gold producer Zijin Mining Group surged 4.5 per cent to HK$38.26 as haven demand drove the metal near its record high after the US assault on Venezuela. Pop Mart International Group advanced 1.7 per cent to HK$199.50 after Morgan Stanley said that the toymaker’s US sales would remain strong.
Chinese technology stocks are back on global investors’ radar amid growing concerns about whether the elevated valuations of US peers will hold up after years of outsize gains. Co-founder of hedge fund Bridgewater Associates Ray Dalio said on social media that the artificial intelligence trade that underpinned US tech stocks was in the early stages of a bubble. The underperformance of US stocks against other major markets last year was a sign that investors were shifting to equities outside the US, he said.
“We intend to increase weightings in Eastern equity markets at the expense of the US,” said Gary Dugan, CEO of The Global CIO Office, which advises family offices and ultra-high-net-worth individuals. “Japan, Korea, India and China all enter 2026 on more reasonable valuations, with policy flexibility that is increasingly scarce in the US. China’s heavy investment in technology and green infrastructure continues to shape its future competitiveness, irrespective of short-term sentiment swings.”