China stocks rise as DeepSeek optimism lifts tech sector

Hong Kong — Chinese and Hong Kong stocks were broadly higher on Monday as optimism around AI start-up DeepSeek continued to lift tech stocks, while better-than-expected inflation data buoyed sentiment.

The Shanghai Composite index gained 0.3% to 3,313.75 points by the midday break, adding to the 1.6% advance in the previous week. The blue-chip CSI 300 index was little changed after fluctuating between gains and losses.

In Hong Kong, the Hang Seng index jumped 1.4% and the Hang Seng Tech index rallied 1.8% to a four-month high.

AI-related shares led gains on continued optimism around DeepSeek. Chipmaker Cambricon Technologies jumped 6.2% and AI firm CloudWalk Technology surged to the 20% daily trading limit, leading gains onshore.

China’s three largest telecom operators — China Mobile, China Unicom and China Telecom — gained 1.2% to 5.9% after saying they were working with DeepSeek’s open source model to “promote inclusive application of the latest AI technology”.

“Onshore market could keep this upward momentum until the Two Sessions in March despite the volatility, boosted by the launch of DeepSeek AI which has increased market confidence,” analysts at China Securities said in a note.

Concerns about US-China trade tensions may also ease in the short term as investors increasingly view tariff threats as negotiation tactics, they said.

Meanwhile, worries about China’s deflation eased after data released on Sunday showed consumer inflation accelerated to its fastest in five months in January thanks to the holiday spending.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.38% while Japan’s Nikkei index was up 0.05%.

Reuters