Hong Kong stocks erase gains near 5-month high as DeepSeek-led rally wanes
Stocks erased earlier gains on Monday as technical charts showed the DeepSeek-led rally this year was overstretched
The Hang Seng Index was little changed at 22,616.23 on Monday, after rising as much as 1.6 per cent. The Tech Index lost 0.5 per cent, reversing a 2.4 per cent advance. The CSI 300 Index, which tracks the biggest stocks listed in Shanghai and Shenzhen, strengthened 0.2 per cent.
Technical readings on both indices signalled the market was overbought and the rally this year, powered by the breakthrough at Chinese artificial intelligence (AI) start-up DeepSeek, was excessive and due for a pullback.
Tencent Holdings surged 4 per cent to HK$493.60, as it introduced DeepSeek’s R1 model on its WeChat platform. China Unicom advanced 7.7 per cent to HK$8.87, while smartphone and car maker Xiaomi rose 1.2 per cent to HK$45.25. Among losers, Baidu slumped 6.9 per cent to HK$89.85 and JD.com fell 3.6 per cent to HK$157.10.
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The market opened brightly, after Goldman upgraded its 12-month target for MSCI China Index to 85 from 75, implying a 16 per cent upside from current levels, analysts including Kinger Lau wrote in a report on Monday. The Wall Street investment bank also raised its target for CSI 300 Index to 4,700, implying a 19 per cent upside.