SHANGHAI: China and Hong Kong stocks closed higher on Friday and posted gains for the week, led by a strong performance in AI shares as home-grown startup DeepSeek’s success boosted investor sentiment.
China’s blue-chip CSI300 Index climbed 1.3%, while the Shanghai Composite Index gained 1.0%. Hong Kong’s benchmark Hang Seng added 1.2%.
The Hang Seng Index soared 4.5% this week to log its best performance in four months, while the CSI 300 Index rose 2.0%. “DeepSeek (is) a re-rating catalyst.
The development of DeepSeek has attracted the attention of global markets - it reconfirmed China’s continued ability to innovate,“ HSBC analysts said.
Gao Zhe, portfolio manager of Harfor Fund Management Co, said, “In 2025, China’s AI industry is likely to enter a flourishing period, accelerating prosperity investments with more emphasis on the development of applications.”
The CSI AI index was up 2.5%, taking its gains to more than 8% for the holiday-shortened week. Tech majors listed in Hong Kong were up 1.8%. “We think 2025 is the year the investing world realises China is out-competing the rest of the world,” said Peter Milliken, research analyst at Deutsche Bank. Milliken sees China’s valuation discount disappearing and said profitability can surprise to the upside through the economic cycle due to policy swings aimed at boosting consumption and from financial liberalisation. Real estate stocks rose 2.7%, led by a near 6% jump in Vanke as investors gained confidence following management changes at the property major.
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