SHANGHAI, Feb 7 (Reuters) – China and Hong Kong stocks closed higher on Friday and posted gains for the week, led by a strong performance in AI shares as home-grown startup DeepSeek’s success boosted investor sentiment.
** China’s blue-chip CSI300 Index climbed 1.3%, while the Shanghai Composite Index gained 1.0%. Hong Kong’s benchmark Hang Seng added 1.2%.
** The Hang Seng Index soared 4.5% this week to log its best performance in four months, while the CSI 300 Index rose 2.0%.
** “DeepSeek (is) a re-rating catalyst. The development of DeepSeek has attracted the attention of global markets – it reconfirmed China’s continued ability to innovate,” HSBC analysts said.
** Gao Zhe, portfolio manager of Harfor Fund Management Co, said, “In 2025, China’s AI industry is likely to enter a flourishing period, accelerating prosperity investments with more emphasis on the development of applications.”
** The CSI AI index was up 2.5%, Syair HK Hari ini taking its gains to more than 8% for the holiday-shortened week.
** Tech majors listed in Hong Kong were up 1.8%.
** “We think 2025 is the year the investing world realises China is out-competing the rest of the world,” said Peter Milliken, research analyst at Deutsche Bank.
** Milliken sees China’s valuation discount disappearing and said profitability can surprise to the upside through the economic cycle due to policy swings aimed at boosting consumption and from financial liberalisation.
** Real estate stocks rose 2.7%, led by a near 6% jump in Vanke as investors gained confidence following management changes at the property major. (Reporting by Shanghai Newsroom; Editing by Sumana Nandy and Subhranshu Sahu)