Hong Kong stocks resumed their impressive start to the year on Wednesday as they rocketed more than three per cent on the back of a surge in tech firms fuelled by fresh optimism over the sector in China.
The rally led gains across most of Asia’s markets, with investors shifting back to buy mode following a poor start to the week sparked by fresh US tariff concerns.
Traders brushed off another disappointing day on Wall Street following more data showing consumers in the world’s top economy were losing confidence.
The Hong Kong market climbed more than three per cent and has enjoyed a blockbuster start to the year, rocketing by almost a fifth to hit its highest level since March 2022.
The rally has come as investors snap up long-neglected tech names after Chinese startup DeepSeek unveiled a chatbot last month that upended the AI universe.
It has also been helped by Beijing’s moves to bring the firms in from the cold after years of government crackdowns on the industry.
E-commerce heavyweight Alibaba was again one of the major advancers, rallying nearly six per cent, with JD.com nine per cent higher, Meituan up nearly 10 per cent and Tencent up four per cent.
Sentiment took a knock at the start of the week from news that US President Donald Trump had signed a memo over the weekend calling for curbs on Chinese investments in industries including technology, critical infrastructure, healthcare and energy.
The move is aimed at promoting foreign investment in the United States while protecting national security interests “particularly from threats posed by foreign adversaries” like China, the White House said.
There were also gains in Shanghai, Seoul, Wellington, Taipei, Manila and Bangkok.
Sydney, Singapore and Jakarta fell.
Tokyo was down but pared earlier losses. It had been hit by a strengthening yen amid expectations that the Bank of Japan would continue hiking interest rates this year, while the currency also benefitted from a pickup in US rate cut bets.
Expectations for Federal Reserve reductions were boosted by a Conference Board survey showing US consumer confidence in February saw its largest monthly decline since August 2021.
The reading came on the heels of other lacklustre US reports including on service sector activity, jobs and inflation.
Rate-cut talk has grown as optimism over the US economy wanes and investors worry that Trump’s tariffs drive and plans to slash taxes, regulations and immigration will reignite consumer prices.
Focus is now on the release of the core personal consumption expenditures price index, the Fed’s preferred inflation metric, which could give a fresh idea about the outlook for US rates.
On Wall Street, the Dow rose but the S&P 500 and Nasdaq retreated as tech giants struggled amid concerns over their high valuations and their huge spending on AI development.
New York’s main indexes have struggled this year as the long-running US tech surge has hit the buffers after Chinese startup DeepSeek unveiled its bombshell chatbot last month, upending the AI scramble.
Earnings from market heavyweight Nvidia on Thursday will be closely watched for an insight into its AI chip sales.
“The main focus though is probably what CEO Jensen Huang says about the state of the chip sector, where AI is going, what the DeepSeek competition means and any impact from tariffs,” said Neil Wilson, an analyst at TipRanks trading group.
