In February 2024, Chinese stocks, especially technology shares in Hong Kong, have surged. Fidelity’s George Efstathopoulos indicates this rally is fundamentally based, unlike previous years. He notes advancements in artificial intelligence and improved economic data as key factors, suggesting a shift towards more sustainable growth. Notably, the Hang Seng index saw a 17% increase, led by tech stocks.
Chinese equities have experienced a notable rally in February, particularly among technology stocks listed in Hong Kong. 2024 has been riddled with trading volatility, leading investors to concentrate on short-term strategies rather than making significant long-term commitments. George Efstathopoulos, who manages multi-asset portfolios at Fidelity International, believes that this year’s market conditions are markedly different from previous years.
Efstathopoulos asserts that earlier rallies were predicated on hopes for market stimulus, whereas currently, the focus is on solid fundamentals. He highlights the advancements in Chinese artificial intelligence and mentions DeepSeek, emphasizing that these developments contest the notion that China lags behind the United States in technology. This evolution serves as a reminder to investors that China is capable of innovation.
Furthermore, Efstathopoulos points to improved economic indicators, particularly in consumption, suggesting that fiscal measures have the potential to invigorate consumer spending. While additional efforts are needed, there are early signs of recovery within China’s property sector. In February, Hong Kong’s Hang Seng index rose by 17%, with the technology sector, represented by HHSTECH, leading gains at 24%.
In summary, Fidelity International’s George Efstathopoulos emphasizes that the current rally in Chinese markets is fundamentally driven rather than speculation-based. The emergence of notable advancements in technology and improvements in economic data, particularly in consumption and the property market, signify a shift that could bolster investor confidence moving forward. Overall, the rally reflects a significant transformation in market dynamics compared to previous years.
Original Source: www.tradingview.com
