Hong Kong stocks fall in volatile trading as tech-driven rally calms down
Investors are poised to keep a close eye on the National People’s Congress next week
The Hang Seng Index retreated from its highest level in three years, falling 0.3 per cent to 23,718.29 at the close. The Hang Seng Tech Index shed 1.2 per cent after briefly rising above the 6,000-point mark on Wednesday for the first time since December 2021.
On the mainland, the CSI 300 Index and the Shanghai Composite Index both rose 0.2 per cent. The tech-heavy Star Market 50 Index slipped 0.1 per cent.
Investors seem to be taking Thursday’s pullback in stride on the belief that the artificial intelligence breakthrough by Chinese start-up DeepSeek would drive corporate earnings and overcome the deflationary environment. Investors on the mainland and around the world have been increasing their allocations to the Hong Kong stock market, where Chinese tech companies trade at discounts to their American peers, as US President Donald Trump’s tariff policies have stoked fears about sticky inflation and slowing growth, according to analysts.
“At this point, the old playbook on Chinese consumer spending feels outdated,” said Stephen Innes, managing director at SPI Asset Management in Bangkok. “Whether shoppers splurge on discretionary goods matters far less than the unstoppable march of AI, cloud computing, and automation. These aren’t just trends but tectonic shifts in China’s stock markets. If China follows the US’ AI mania, we could look at a whole new driver of market momentum.”