Hang Seng Index Trades at One-Month High After China Investors Increase Exposure

Li Chen
12 Feb, 2025
Hong Kong

Stock market indexes in China and Hong Kong extended gains, and investors piled into leading technology companies. 

The Hang Seng index jumped nearly 2%, and the CSI 300 index advanced a fraction as mainland China investors increased their leading tech companies trading in Hong Kong. 

Alibaba Group, Tencent Holdings, Xiaomi Corp., and SMIC led the gainers in Hong Kong for the second week in a row amid persistent buying by mainland investors. 

Mainland institutional investors increased exposure to tech stocks trading in Hong Kong in the hopes that the affordable access to artificial intelligence will improve earnings growth in the near term.

Individual investors increased their exposure to stocks denominated in Hong Kong dollars amid worries of yuan devaluation.

Mainland-China-based funds purchased a total of HK $1.38 billion worth of stocks on Stock Connect through February 11, according to the latest data available from exchanges. 

China-based funds invested a total of HK $807.9 billion in 2024 in Hong Kong stock, a record high since the launch of the cross-border investing link in 2014. 

Wall Street indexes wavered around the flatline after Fed Chair Powell confirmed that inflation is slowing but remains above the long-term target rate. 

Market participants were cautiously optimistic after Chairman Powell confirmed that the U.S. economy is on solid footing and the labor market remains strong, and the central bank is in no hurry to lower rates in the near future. 

However, on Wall Street, benchmark indexes struggled to advance amid growing fears of a wider trade war sparked by the chaotic Trump administration and fears of resurgent inflation. 

Higher interest rates in the U.S. will keep rates higher in Hong Kong because of the currency's linked status with the U.S. dollar, which could negatively impact the housing market. 

 

China Indexes and Stocks

The Hang Seng index jumped 1.9% to 21,697.58, and the mainland-focused CSI 300 Index advanced 0.2% to 3,890.54. 

Alibaba Group Holding surged 7.4% to HK $112.60, Tencent Holdings Ltd. advanced 2.7% to HK $438.80, SMIC gained 4.5% to HK $47.30, and Xiaomi Corp. added 3.3% to HK $43.95.

Guming Holdings was nearly unchanged after the bubble tea maker listed its stock on the Hong Kong Exchange. 

Guming traded at HK $9.32 after the company sold 182 million shares priced at HK $9.94 per share and raised HK $1.72 billion or $220 million. 

The company operates 9,778 premium-tea stores in smaller cities in China. 

CATL Co. Ltd. increased 1.8% to ¥255.30 after the battery maker for electric vehicle filed to list its stock on the Hong Kong Exchange.