China technology stocks jump as index hits four-year high

A blistering rally in Chinese technology shares accelerated yesterday as renewed bets on artificial intelligence sent a key gauge to the highest in nearly four years.

- CHARLOTTE YANG

The Hang Seng Tech Index, which tracks the largest tech firms listed in Hong Kong, rose as much as 3.9% to hit its highest level since November 2021. Search engine operator Baidu Inc led gains with a 19% jump, but multiple tech giants came along for the ride: Shares of Alibaba Group Holding Ltd, Semiconductor Manufacturing International Corp, and JD.com Inc all surged in morning trading.

The index is now set for its seventh consecutive week of gains, helped by easing tensions between China and the US as well as hopes that tech companies’ big bets on AI will pay off. The gauge has surged 41% this year, trouncing a benchmark of regional peers.

“China tech leaders are visibly re-accelerating AI spend and product rollouts — models, robotaxis, in-house chips — while also proving they can monetise AI faster than many expected,” said Charu Chanana, chief investment strategist at Saxo Markets. “With valuations lagging the US, investors are starting to pay attention again.”

The Hang Seng Tech Index trades at around 20.5 times forward earnings, below its five-year average of 23.3 times earnings and Nasdaq 100 Index's ratio of 27 times, according to Bloomberg-compiled data.

If the rebound continues, it could accelerate the return of capital to China’s markets after years of gyrations due to regulatory crackdowns and post-pandemic economic woes. The surprise debut of a DeepSeek AI model at the start of this year has fuelled renewed interest in the whole Chinese AI universe, putting the country back on the map as a contender for Al leadership.