Fidelity points out that the current rally in Chinese stocks, particularly in technology, is fundamentally driven, unlike last year’s speculative surges. Portfolio manager George Efstathopoulos notes advancements in AI and improving economic data, suggesting a more sustainable market recovery. The Hang Seng index has seen substantial gains recently, particularly in tech.
Fidelity International’s George Efstathopoulos, a portfolio manager, asserts that the current rally in Chinese shares is significantly different from previous ones. While 2023’s market surges hinged on hopes for stimulus, this year’s gains are driven by fundamentals. He emphasizes that the rise of Chinese artificial intelligence, notably deep learning technologies like DeepSeek, demonstrates that China is making strides in technology innovation, challenging the perception of being behind the US.
Better economic indicators, especially in consumption, are also emerging. Efstathopoulos suggests that although further fiscal policy measures are necessary, these indicators imply that current policies could effectively stimulate consumption. Additionally, there are nascent positive trends in the Chinese property market. As a result, Hong Kong’s Hang Seng index has surged by 17% in February, driven primarily by a 24% rise in the tech sector’s Hang Seng TECH index.
Fidelity highlights a paradigm shift in the Chinese market, emphasizing that current gains are based on sound fundamentals rather than speculation. With significant advancements in technology and improving economic conditions, the outlook for Chinese stocks appears more promising than in previous years. Investors are advised to consider these long-term trends rather than short-term volatility.
Original Source: www.tradingview.com
