Multiple Positive Catalysts Lift Tech Stocks; UBS Elevates China Tech to Most Attractive, Citing AI as Core Rationale

The Hang Seng Tech Index (800700.HK) experienced a strong advance today, rising as much as 4% in early trading and remaining up over 3% at the time of reporting, with a range of leading technology names advancing together. As of publication, NetEase-S (09999.HK) was up more than 5%, Alibaba‑W (09988.HK) and Bilibili‑W (09626.HK) rose over 4%, and Baidu Group‑SW (09888.HK), Tencent Holdings (00700.HK), JD Group‑SW (09618.HK), Trip.com Group‑S (09961.HK), and Xiaomi Group‑W (01810.HK) all recorded gains exceeding 3%.

Market sentiment in Hong Kong has been buoyed by a cluster of favorable policy and industry developments. A notable diplomatic advance in Sino‑US economic and trade communication occurred on the morning of October 18 (Beijing time), when China’s lead economic and trade representative, State Council Vice Premier He Lifeng, held a video discussion with U.S. Treasury Secretary Bessent and U.S. Trade Representative Greer. The parties agreed to candid, substantive exchanges on key bilateral trade matters to implement leaders’ consensus and to promptly commence a new round of economic and trade consultations.

Concurrently, UBS Global Wealth Management upgraded its stance on global equities to “attractive,” raising its ratings for major markets including China, the United States, and other emerging markets. The UBS report attributes the revision to two principal forces: ongoing elevated capital expenditure in artificial intelligence, which is expected to boost productivity, and an improving global policy backdrop. UBS highlighted that strategic alliances among AI leaders have strengthened confidence in a sustained capital‑spending cycle and in clearer revenue visibility, trends that should support risk assets over the next six to twelve months. Chinese technology stocks, as central participants in AI deployment and innovation, are positioned to capture substantial benefits from this dynamic.

Concrete technological progress and rapid uptake of applications reinforce the constructive case. Alibaba Cloud’s internally developed pooled computing solution “Aegaeon” has been accepted for presentation at the SOSP 2025 conference. Designed to address GPU underutilization in AI model serving, the solution materially improves resource efficiency and has already been deployed on Alibaba Cloud’s Bailian platform, providing an operational lever for cost reduction and productivity gains across the industry. In addition, the “Generative Artificial Intelligence Application Development Report (2025)” released by the China Internet Network Information Center at the Sixth China Internet Infrastructure Conference indicates that China’s generative AI user base has exceeded 515 million, up 266 million since the end of 2024 and having doubled within six months to reach a penetration rate of 36.5%.

The report further notes that domestic large models are the first choice for more than 90% of users, underscoring strong market acceptance of indigenous technology. Generative AI has already permeated intelligent search, content creation, office assistance and smart hardware, while pilot applications are extending into agriculture, manufacturing and scientific research. Collectively, these developments position generative AI as a significant driver for improving efficiency and quality in the digital economy.