Chinese stocks are set to extend gains next year after rising for a second year on fading geopolitical risks, investors re-evaluating the technology sector and household savings finding their way into equities amid low interest rates.
The CSI 300 Index of the biggest stocks traded in mainland China has risen 17 per cent this year, while Hong Kong’s Hang Seng Index has advanced almost 30 per cent. The stellar gains have taken by surprise many global investment banks and asset-management firms, which had turned cautious on Chinese stocks earlier this year.
“We expect the bull run to continue, but at a slower pace,” said Goldman Sachs analysts led by Kinger Lau in a report on Monday. “This is reminiscent of an equity cycle transition from hope to growth, where both earnings realisation and moderate [valuation] expansion typically supersede strong but volatile re-rating gains to drive returns.”
Artificial-intelligence start-up DeepSeek’s sudden rise in January prompted a re-rating of Chinese technology stocks from Alibaba Group Holding to Tencent Holdings, while triggering a rout in their US peers. After stocks initially tumbled in April following the Trump administration’s “Liberation Day” tariffs, risk sentiment quickly recovered as the world’s two largest economies reached deals to tentatively put aside the tariff dispute.
