Hong Kong's stock market surged, leading Asian markets, driven by Alibaba's (BABA) robust performance. The Hang Seng Tech Index soared over 6.5%, marking its largest gain since October last year, while the Hang Seng Index and Hang Seng China Enterprises Index rose around 4%, reaching three-year highs. Alibaba's Hong Kong shares jumped nearly 15%, hitting a three-year peak, with trading volume reaching a record high.
The A-share Sci-Tech Innovation 50 Index also climbed nearly 6%, its largest increase in over four months, led by computing power stocks like Cambricon Technologies and Hygon Information. This rally followed Alibaba's announcement of significant investments in artificial intelligence infrastructure over the next three years, exceeding the past decade's expenditure.
The rise of DeepSeek has sparked a reevaluation of Chinese tech stocks, attracting foreign institutions, including Morgan Stanley, to show optimism towards Chinese equities. As Hong Kong enters its earnings season, Alibaba's impressive results in e-commerce and cloud services, along with its clear AI development goals, have further boosted market sentiment.
Southbound funds resumed net buying of Hong Kong stocks, exceeding HKD 14 billion, with Alibaba receiving a net buy of approximately HKD 1.223 billion, becoming the most actively traded stock. Despite recent gains, analysts note that the market needs time to verify the benefits of Alibaba's increased AI investments on fundamentals like costs and profits.
Other stocks also rose on positive earnings, with Chow Tai Fook Jewellery climbing over 17% to a record high, and Bilibili posting better-than-expected adjusted EPS for the fourth quarter.
