The Hang Seng Tech index has soared to a four-year high as Chinese technology companies jumped. It jumped to a high of H$5,860, up by almost 100% from its lowest point in 2024. So, will Hong Kong’s equivalent to the Nasdaq 100 index continue surging?
Top Hang Seng Tech Index stocks are surging
PDD Holdings stock price has staged a strong comeback, and is about to form a golden cross as investors flocked back to Chinese technology companies. It soared to a high of $130 on Friday, the highest point since October last year.
PDD Holdings stock price surge has mirrored that of other Chinese technology companies. Alibaba stock price soared by over 14% in Hong Kong and reached its highest level since 2021. BABA has surged by 120% from its lowest level in 2024.
Xiaomi, on the other hand, has soared in the last eight straight months and moved to a record high. Tencent Holdings stock price soared to H$520, a record high.
The other notable companies in the index are Meituan, JD, Baidu, NetEase, and Lenovo have all done well this year.
Why Hong Kong tech stocks have jumped
There are a few reasons why Hong Kong’s technology stocks have surged this year. First, there are signs that Beijing has ended its war against giant tech companies. Just this week, President Xi Jinping met with executives from the biggest tech companies in the country as a way of patching relations.
Beijing hopes that Chinese technology companies will continue growing and offer counterbalance to America’s technology juggernauts like Amazon, Meta Platforms, and Microsoft. It also hopes that the firms will continue employing more Chinese at a time when youth unemployment rate has risen.
The Hang Seng Tech index has also jumped because of the recent breakthrough made by DeepSeek. DeepSeek claims to have used normal technology like semiconductors, disrupting the existing status quo where firms like OpenAI are spending billions of dollars on AI infrastructure.
Many Chinese firms are also investing in AI. Alibaba stock price surged on Friday after the company pledged to invest aggressively in AI in the next three years. The company also announced that it will be Apple’s AI partner in China.
Further, the biggest Hang Seng Tech index constituent companies have announced strong financial results.
For example, the most recent results showed that PDD Holdings revenues jumped by 44% to $14.3 billion in the third quarter. Its operating profit soared by 46%, while net profit soared to $3.55 billion.
Xiami, China’s equivalent to Apple, also had strong results as its third quarter revenue rose by 30% to RMB 92.5 billion. This explains why the stock has jumped as the firm incorporated artificial intelligence in its operations.
Hang Seng Tech Index analysis
Hang Seng Tech Index chart by TradingView
The weekly chart shows that the Hang Seng Tech index has done well in the past few weeks. This rebound happened after the index formed a symmetrical triangle between 2023 and late 2024. The stock’s rebound happened after the two lines neared the confluence level.
The Hang Seng Tech Index has now soared above the key resistance level at H$5,437, its highest swing in October last year. It has also jumped above the 38.2% Fibonacci Retracement level. Therefore, the stock will likely keep rising as bulls target the 50% retracement point at H$6,837, the 50% retracement point.
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