Hang Seng Tech Index surges 1.4% as global tech rally extends

The Hang Seng Tech Index surged 1.4% on Monday, extending a global technology rally that pushed the Nikkei 225 and S&P 500 to record highs last week.

"The AI-driven momentum is sweeping across Asian markets, with Hong Kong tech names catching up to their US and Japanese peers," said Kenny Ng, strategist at Everbright Securities International.

The HSTECH's advance outpaced the broader Hang Seng Index, which rose 0.7% to 25,182.39. The rally in Hong Kong tracked gains across the region: Tokyo's Nikkei 225 climbed 2.5% to a record 66,329.50 on Friday, while Seoul's KOSPI surged 3.6%. On Wall Street, the S&P 500 added 0.2% to close at a fresh all-time high of 7,580.06, and the Nasdaq gained 0.2% to 26,972.62.

"It looks like we'll wrap up a ninth consecutive week of higher markets, largely driven by some new names coming out to be beneficiaries of artificial intelligence," said Art Hogan of B. Riley Wealth Management, citing Dell, Micron and SanDisk among individual companies that delivered big gains. Chipmakers Micron and SK hynix each crossed the $1 trillion market capitalization threshold this week.

"The driver is overwhelmingly AI-related capital expenditure," said Matthew Martin of Oxford Economics. "While reduced risks from the war have helped, the improvement in equity prices is mostly because of a robust earnings season."

In contrast, the Shanghai Composite slipped 0.7% to 4,068.57, as mainland financial and consumer stocks lagged. The divergence highlights the rotation toward technology names in Hong Kong while traditional sectors in China face headwinds.

The sustainability of the rally may hinge on whether a US-Iran ceasefire deal materializes by early June, which could further lower oil prices and ease recession risks. "Oil traders are taking an optimistic view that the end could be in sight for disruption in the region," said Derren Nathan, head of equity research at Hargreaves Lansdown. Brent crude fell 1.8% to $92.05 a barrel on Friday, while West Texas Intermediate dropped 1.7% to $87.36.

In currency markets, the euro strengthened to $1.1663 against the dollar, while the dollar traded at 159.27 yen. European equities were mixed, with the FTSE 100 slipping 0.1% to 10,416.07 and the DAX flat at 25,104.70.

This article is for informational purposes only and does not constitute investment advice.