On February 21, 2025, a gripping spectacle unfolded in the global financial markets during the trading session, captivating countless investors as the trajectories of the Hong Kong and A-share markets drew significant attentionThe performance of the Hong Kong stock market today can only be described as stunning, showcasing remarkable resilienceA brief dip on the previous day did little to hinder its upward momentumToday, all three major indices surged powerfully, once again setting new highs not seen in nearly three years.
After experiencing a 1.60% drop yesterday, the Hang Seng Index opened high today, with intraday gains reaching as much as 2.95%. The Chinese Enterprises Index, which fell by 1.66% the preceding day, opened today with a 2.45% increase and even touched a high of 3.05% during tradingSimilarly, the Hang Seng Tech Index, which experienced a 3.04% drop yesterday, opened with a tremendous gain of 3.36% and peaked at an impressive 4.15% during the day.
Analyzing the underlying trends in industry development, the robust performance of these tech stocks can be attributed to groundbreaking advancements in AI technologies, particularly the industry transformation instigated by DeepSeekThis innovation has revolutionized cost reduction in AI computing power and model optimization, significantly reshaping global capital's perception of Chinese tech assets
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Notably, the training costs of their R1 model are just one-tenth of the industry average, substantially enhancing the competitiveness of Chinese AI companies on the global stageMoreover, Hong Kong tech stocks have been undervalued for an extended periodSpecifically, the average price-to-earnings (P/E) ratio of constituents in the Hang Seng Tech Index remained around 20 times over the past year, a stark contrast to global counterpartsNow, driven by both technological advancements and capital influx, these stocks are finally undergoing a much-needed value correctionNotably, significant capital flow into the Hong Kong stock market, particularly in tech shares, marked a net inflow of 15 billion Hong Kong dollars, accounting for a staggering 70% of the total southbound capital.
This vibrant activity in the Hong Kong stock market has had a direct and pronounced effect on the A-share marketAs the trades commenced, various factors led to brief fluctuationsInitially, the A50 futures index plummeted after starting with a promising 0.85% increase, falling into negative territoryHowever, as the gains in the Hong Kong market intensified, the A50 futures surged back, rallying to a 1.30% increase midway through tradingLikewise, after a dip and subsequent rebound, the three major indices of the A-share market transitioned from a loss to a gain, all influenced by significant upward shifts in the Hong Kong marketDespite these gains, it is worth mentioning that the stocks entering a correction phase numbered over 3000, largely due to previous excessive climbs in tech stocks.
In observing the sectors leading the A shares, notable performers included liquid-cooling servers, various power supply equipment, communication services, data centers, computing power leasing, and Alibaba's related concepts, alongside semiconductor technology and supercapacitorsThese sectors, closely tied to technology and the digital economy, reflect sustained market attention and investment enthusiasm in technological fields
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