Hong Kong stocks gain on valuation focus as DeepSeek sparks US tech rout
Stocks rise on bets investors will look for cheaper options after DeepSeek’s popular low-cost AI model sparked a US$1 trillion tech rout
Hong Kong stocks rose, bucking losses in regional markets, on speculation global funds will switch from expensive US tech companies after Chinese start-up DeepSeek sparked a sell-off on Wall Street with its popular low-cost artificial intelligence (AI) model.
The Hang Seng Index rose 0.1 per cent to 20,225.11 on Tuesday, adding to a 0.7 per cent advance on Monday. Tencent advanced 1.4 per cent to HK$401.20 while Alibaba Group Holding increased 1.2 per cent to HK$88.30. Baidu jumped 3.6 per cent to HK$87.80 and smartphone and carmaker Xiaomi climbed 3.2 per cent to HK$38.30.
Trading on the Hong Kong stock exchange closed at noon for the Lunar New Year holiday and will reopen on January 31. Mainland stock exchanges, whose key benchmark CSI 300 rose 3 per cent in January, were closed on Tuesday and will resume trading on February 5.
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“Given the rise of DeepSeek, the market speculates that fewer high-end chips will be needed in the future,” Kelvin Lau, an analyst at Daiwa Capital Markets, said in a report. “China will continue to boost their [semiconductor] production capabilities, necessitating more domestic substitution.”