Shares of Chinese technology companies listed in Hong Kong on Friday, February 21, showed their best weekly winning streak since 2020, as earnings surpassing preliminary expectations and optimism about the artificial intelligence sector gained global investors who made financial injections into the relevant area.
The Hang Seng Tech Index closed up 6.5%. These rates of the upward dynamic of the indicator are the best one-day increase since October. The Hang Seng Tech Index has reached its highest level in three years. The weekly gain of the indicator exceeded 6%. It is worth noting that the mentioned index has been on a growth trajectory for six consecutive weeks. This is the longest winning streak since May 2020.
Hong Kong’s benchmark Hang Seng Index showed an increase of 4%. After Friday’s growth, this indicator reached a three-year high.
Alibaba shares showed an increase of 14.6%. In this case, the securities reached their highest level since the end of 2021, after the e-commerce giant reported revenue that turned out to be higher than preliminary expectations for its dynamic. Another factor in the stock’s growth was the fact that Alibaba announced plans to increase financial injections into the artificial intelligence sector and the e-commerce area.
Lenovo shares rose by more than 15%, reaching an almost ten-year high. The dynamic of the company’s securities was impacted by the fact that its quarterly results exceeded the preliminary forecasts regarding the movement of the relevant indicators.
Xiaomi shares rose 5.2%. This indicator has reached an all-time high.
Shares of Chinese technology companies have been on a trajectory of steady and intense growth after DeepSeek, an artificial intelligence developer from an Asian country, launched its low-cost AI model last month, which demonstrated high, competitive performance, became popular globally, revived investor interest in China and spurred funds into rotating into the sector because of its relatively cheap valuations.
According to media reports, investors are currently betting that this week’s rare meeting between the President of the People’s Republic of China Xi Jinping, and the biggest business leaders of an Asian country, including Alibaba’s founder Jack Ma, is probably a signal that Beijing, as a political center, will change its approach to the technology area after several years of crackdowns. These expectations contain the hope for the growth of the Chinese technology industry.
HSBC analysts said in a note that there is more to go with the valuation discount to emerging markets to narrow more. They also noted the return of inflows of foreign investment into China over the past two weeks.
Onshore stocks also showed growth on Friday. The blue-chip CSI 300 Index increased by 1.3%. The Shanghai Composite Index rose 0.9%. It is worth noting that both of these benchmarks are at their highest levels since the end of December.
It is still unknown how long the mentioned tendency of growth will last. In the long term, it is obvious that the Chinese technology sector must present certain developments that confirm its competitiveness in a global context.
