The Hong Kong stock market regained momentum on Monday, surging nearly 670 points to finish its second trading day in the Year of Horse above 27,000, fueled by buoyant technology sector.
The special administrative region’s benchmark Hang Seng Index (HSI) opened higher and at one point jumped more than 742 points during the morning trading session, reaching a peak of 27,156.28.
The rally continued in the afternoon and supported the index to gain 668.56 points, or 2.53 percent, closing at 27,081.91 points. Market turnover reached HK$172.96 billion ($22 billion).
The Hang Seng China Enterprises Index — a barometer of Chinese mainland companies — swelled 2.65 percent to 9,197.38 points, while the city’s technology stock gauge, the Hang Seng TECH Index, soared 3.34 percent to close at 5,385.35 points.
The technology and internet sector led the rally, with Meituan, one of China’s largest instant retail platforms, increasing 5.26 percent to HK$85 per share. JD.Com rose 3.56 percent, while Alibaba Group Holding added 3.47 percent, Xiaomi Corp 3.39 percent, and Baidu Inc 3.26 percent.
However, some artificial intelligence and robotics stocks fell, after stunning performance last Friday. Zhipu AI – formally known as Knowledge Atlas Technology JSC Ltd -- plunged 22.76 percent, while MiniMax Group Inc slumped 13.35 percent.
ALSO READ: Hong Kong optimistic about equity, gold trading
Gold mining stocks also trended upward, as capital flocked to precious metal amid a new high in spot gold prices, which fetched over $5,140 per ounce on Monday.
Leading mainland miner, Zijin Mining Group Co Ltd, surged 5.35 percent to nearly HK$45 per share, making it the best-performing HSI constituent of the day. DBS Group raised the target price for the company’s H-share to HK$55, citing growth prospects driven by financial institutions’ need for gold reserves and an intensifying demand for copper fueled by the AI boom.
As investors gear up for faster AI advancement and tech-driven economic growth in China this year, analysts expect technology and consumables to be the main focus of the Hong Kong stock market.
For cyclical consumables such as crude oil, gold, and technology hardware, “the pullback at the beginning of the year has not shaken our confidence”, said Li Yujie, a strategist at Huatai International.
Li said that rising investment demand across global defense, trade, and traditional manufacturing sectors is driving greater consumption of materials and components.
“From a long-term perspective, constraint-supply resources and cycle-sensitive products continue to offer meaningful allocation value,” Li added.
JPMorgan is bullish on Chinese stocks across the board, particularly the commodity and technology segments – including robotics, semiconductors, and biotechnology – as well as broker, insurance and consumer staples stocks.
The investment bank estimates that the approach of investors to Chinese stocks will shift from opportunistic trading themes or sector rotations to long-term appreciation allocations.
The Hong Kong equity market is expected to see more southbound inflows on Tuesday as Stock Connect trading resumes following the Chinese New Year break.
