BOCOM INTL: AI valuation reshapes the narrative, leading Hong Kong stocks to a "bright start"

BOCOM INTL released a research report stating that it is worth noting that the recent two-week rise in the Hang Seng Index has been driven by valuations. The current position has recovered sufficiently from the low point in early January, and the short-term upward trend has been rapid, causing the Hang Seng Index to enter the overbought zone. At the same time, from the market perspective, the rise in the Hang Seng Index is mainly concentrated in the information technology sector, with limited spread to other sectors, therefore there may be some short-term adjustment risks, and investors may adjust their positions accordingly, observe the situation of profit increase. The main points of BOCOM INTL are as follows: DeepSeek leads the reshaping of mainland AI valuation, Hong Kong stocks achieve a good start, and the Hang Seng Index leads major global indices: The positive impact of DeepSeek continues, and the technology growth theme leads the "good start". Mainland artificial intelligence, represented by DeepSeek, has made breakthrough progress, leading the reshaping of AI valuations, and continues to spread in the AI industry chain of Hong Kong stocks such as semiconductor, driving the Hang Seng Index and the Hong Kong Technology Index to lead global markets; The high level of the US 10-year Treasury yield has fallen, easing overseas liquidity pressures. Although the overall tone of the January FOMC meeting remains "hawkish", concerns such as the US fiscal deficit have eased, and the US 10-year Treasury yield has returned to a relatively neutral level of 4.5%, easing liquidity pressures. Trump has temporarily postponed tariffs on Canada and Mexico, global risk appetite is first suppressed then increased. Under tariff uncertainty, internal expectations are still supportive: despite the uncertainty, the current market has expectations, and overall valuation levels in Hong Kong stocks are low, providing some resilience; The current market is being boosted by two major positive factors. First, under the leadership of DeepSeek, the technology sector has experienced a reshaping of valuations and a rebound in risk appetite; second, the National People's Congress and the Chinese People's Political Consultative Conference are scheduled to convene on March 5, 2025, and more proactive fiscal policies are expected to support the stock market.