Hong Kong’s Hang Seng Index led the world higher in late February as international capital continued to buy Chinese technology assets amid the rapid growth of emerging Chinese technology companies such as DeepSeek, a-share Star Board also performed well. In contrast, since the beginning of the three major U. S. stock indexes, especially some of the technology giant’s performance is not satisfactory, causing hot debate in the market.
Recently, according to the latest research report released by domestic institution Soochow Securities, it is found that Chinese assets continue to deduce the technology market, and Hong Kong stocks have led the Global Rally for two consecutive weeks. Hong Kong’s Hang Seng Index is up 17.0% for the year to Feb. 21, far outpacing major developed markets in Europe and the as well as major emerging market indexes in India and Brazil. In particular, the Hang Seng Technology index rose as much as 31.1% this year, its strong performance in the world’s major sub-index, “A ride without dust.”.
Chen Meng, chief analyst of overseas strategy at Soochow Securities Research Institute, told the Global Times on the 25th that taking the opportunity of the rapid global popularity of DeepSeek’s R1 model launched on January 20, hong Kong’s Hang Seng Technology Index has begun a rapid rally, hitting a three-year high. Dong Shaopeng, an advisory member of the China Securities Industry Association, told reporters that an important reason for the rise in the Hong Kong stock market was the flow of global funds into Chinese assets in the reallocation, reflecting the global capital’s confidence in Chinese assets.
According to a report on CNBC.com on the 25th, citing data from Japan’s Nomura, 50% of the fund companies surveyed said they had cut their asset allocation in India by the end of January this year, it also increased its allocations to China and Hong Kong. The MSCI China Index has risen 26.5 percent from its January low and is up nearly 18 percent this year, while the MSCI India index is down more than 7 percent this year, the report said, citing analysts at Lean Capital Management.
Deepseek’s breakthrough in artificial intelligence has pushed hedge funds into the Chinese stock market at the fastest pace in months, driven by a reallocation of funds, Bloomberg said Wednesday, in the past month alone, the total market value of Chinese and foreign equities has risen by more than $1,300 bn. In the other major offshore market for Chinese assets, the Nasdaq China Golden Dragon Index has also been eye-catching this year.
This hot trend has even affected international capital’s interest in American tech giants, “DeepSeek has made some investors nervous,” the Wall Street Journal quoted the Chief Technical Strategist of market research firm Blue Chip Daily Trend Report as saying in a report on the 25th, raising questions about the future of some U.S. technology companies whose emergence has upended Wall Street, let Nvidia and the other seven tech giants that had driven most of the gains in US stocks“Look less impressive”.
In a recent report by Bloomberg News, Morgan Stanley, as an international investment bank that has always been cautious about the Chinese market, recently upgraded its rating on the Chinese market, which is an important shift, this suggests that a fundamental shift in global investor attitudes may be under way. The Wall Street Journal reports that Deepseek’s strong entrance, it has shaken the U.S. stock market’s belief-based on the logic of the u.s.-based AI industry-that AI needs a lot of new infrastructure, energy and chips, mainly from Nvidia, the winners in AI will be American technology companies.
Dong Shaopeng believes that the breakthrough made by Chinese technology companies, represented by DeepSeek, has opened up the market’s imagination of the subtle changes in the balance of power between Chinese and American technology, and give global capital an incentive to choose Chinese assets for reallocation. At the policy level, last September the central bank created two instruments to support the healthy development of the capital market: swap facilities for securities, funds and insurance companies, and stock repurchase and re-lending, the result has been a strong rally in Chinese stocks. Dong Shaopeng believes that the underlying support for Chinese assets is still the performance of China’s macro economy. He believes that China’s economy will continue to show super-resilience in the expectation that it will continue to make breakthroughs in cultivating new-quality productivity and continue to introduce macroeconomic policies in 2025, this will support the Chinese assets continue to be international capital bullish.
In addition to the collective efforts of Chinese technology companies to boost Chinese assets. China’s new macroeconomic policies are also an important factor in instilling confidence in foreign investment, according to Reuters. In recent months, the Chinese government has put more emphasis on expanding domestic demand and boosting consumption, the report said, adding that the“Cash-for-clunkers” policy was extended to mobile phones and other consumer electronics in 2025. Further economic policy announcements are likely to come during the annual parliamentary session in March, when consumers are expected to spend more.