Hong Kong stocks hit 4-month high as DeepSeek-driven revaluation takes hold

Name: China’s Alibaba releases new AI model, said to outperform competitors Deepseek and OpenAI’s GPT-4o
Uploaded: 2025-02-12T02:39:55.000Z
Duration: 1 min 20 s
Description: China’s Alibaba releases new AI model, said to outperform competitors Deepseek and OpenAI’s GPT-4o

The rally in Chinese stocks spurred by DeepSeek’s AI model still has some way to go, according to UBS and Morgan Stanley

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The hype around AI start-up DeepSeek continues to drive Chinese tech stocks higher. Photo: Reuters

Zhang Shidongin Shanghai

Published: 10:39am, 12 Feb 2025Updated: 4:34pm, 12 Feb 2025

Hong Kong stocks rose on Wednesday, lifting the benchmark index to its highest level in four months, as the hype over DeepSeek continued to drive sentiment after UBS Group and Morgan Stanley said that the rally had more room to run.

The Hang Seng Index jumped 2.6 per cent to 21,857.92 at the close, the highest since October 7. The Hang Seng Tech Index surged 2.7 per cent, extending a 20 per cent gain from a January low that powered the gauge into a bull market last week.

On the mainland, the CSI 300 Index rose 1 per cent and the Shanghai Composite Index added 0.9 per cent.

Alibaba Group Holding rallied more than 8 per cent after the Post reported that the e-commerce giant tied up with Apple to develop artificial intelligence (AI) features for iPhones in China. Chipmaker Semiconductor Manufacturing International Corporation (SMIC) advanced after a jump in revenue last year.

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China’s Alibaba releases new AI model, said to outperform competitors Deepseek and OpenAI’s GPT-4o

The run-up in Chinese stocks spurred by DeepSeek’s AI model was through less than halfway, as good liquidity and lower interest rates could drive valuation re-rating opportunities ahead for AI-related names, according to UBS.

AI-related stocks had the potential to outperform by 50 to 100 per cent, if previous rallies in 4G, 5G and cloud computing were anything to go by, said James Wang, head of China strategy, at the Swiss bank.