HK Tech Stocks Surge to Three-Year High on AI Optimism

Chinese tech stocks listed in Hong Kong (HSI) rallied on Friday, extending their weekly winning streak to six consecutive weeks, marking their longest since 2020. The Hang Seng Tech Index (HSTECH) jumped 6.5%, its biggest single-day gain since October, reaching its highest level in three years.

The weekly surge exceeded 6%, driven by positive earnings surprises and optimism surrounding the artificial intelligence (AI) sector. Global investors have been rotating funds into tech amid the hype around low-cost AI models like DeepSeek, launched last month.

Alibaba (BABA) led the gains with a 14.6% surge to its highest since late 2021, following a revenue beat and plans for increased investment in e-commerce and AI. Lenovo (0992) climbed over 15% to near a ten-year high after exceeding quarterly estimates, while Xiaomi (1810) hit a record high with a 5.2% gain.

President Xi Jinping's meeting with tech executives, including Alibaba founder Jack Ma, has fueled hopes of a policy shift following previous crackdowns, further fueling the rally. Analysts at HSBC expect the valuation discount to narrow, citing recent foreign investment inflows.

Onshore stocks also rose on Friday, with the CSI 300 Index (000300) gaining 1.3% and the Shanghai Composite Index (000001) climbing 0.9%. Both benchmarks reached their highest levels since late December.

The tech rally has boosted China's onshore and offshore equity markets by over $1.3 trillion in a month, attracting investment flows from India. Chinese companies are catching up with the global AI trend, having missed out previously.