Hong Kong Stocks Rally to Begin the Week

The Hang Seng soared 467 points or 1.8% to end at 27,027 on Monday, swinging from a sharp drop in the prior session as all sectors rallied. A solid session on Wall Street Friday boosted sentiment, with the Dow Jones closing above the 50,000 mark for the first time, amid a rebound in chip stocks and optimism of more policy easing from the Fed. In China, stocks climbed after brokers urged investors to hold positions ahead of the Lunar New Year, noting the recent fall likely ended. On the data front, China's forex reserves hit USD 3.399 trillion in January, marking the highest since 2015 and rising for a seventh month. Gold-linked stocks logged strong gains as the PBoC extended its gold buying spree for a 15th month, with Laopu Gold jumping 5.6%, followed by Zijin Gold Intl. (2.9%), and Chow Tai Fook (2.9%). Innovent Biologics jumped 7.4% on a partnership with Eli Lilly, Minth Group climbed 7.0% after proposing a U.S. AI robotics JV, and Meitu climbed 5.1% on a robust earnings outlook.

Hong Kong shares surged 488 points, or 1.8%, to 27,051 in Monday morning trade, rebounding from prior weakness after Wall Street’s strong upturn on Friday pushed the Dow above 50,000 for the first time. Investors looked past concerns over AI spending, focusing instead on U.S. growth prospects and potential Fed rate cuts. Adding to positive sentiment was fresh data showing Hong Kong’s forex reserves hit a three-year high in January. Gains were broad-based, led by financials, property, and tech, in line with mainland advances, though caution lingered ahead of China’s CPI and PPI data later this week and the Lunar New Year holiday starting February 15. Early standouts included China Overseas Land (3.7%), KE Holdings (3.6%), SMIC (3.3%), AIA Group (2.9%), and HKEX (2.6%). Meanwhile, Montage Technology soared 57% in its Hong Kong debut after raising HKD 7.04 billion in a share sale, underscoring strong demand for the world’s largest memory interconnect chip supplier.

The Hang Seng fell 325 points, or 1.2%, to finish at 26,560 on Friday, reversing strength in the prior three sessions amid broad sector declines. Sentiment was pressured by Wall Street’s third straight sell-off Thursday, highlighting mounting concerns that new AI models could erode software firm profits. In China, equities extended weakness amid caution ahead of January CPI data, with recent gold price volatility seen as a potential driver of consumer inflation. For the week, the index lost 3.0%, its first decline in four weeks, as traders anticipate thinner activity in Hong Kong and mainland markets ahead of the Lunar New Year holiday beginning February 15. Knowledge Atlas Tech (-6.1%), AIA Group (-5.2%), and Minimax Group (-4.9%) were among today’s biggest losers. Meituan slipped 2.2% after agreeing to acquire Dingdong Fresh, the China unit of Dingdong (Cayman), for USD 717 million, though challenges in its core commerce and resource-heavy overseas expansion remain.