AI Boom Sparks Optimism in Chinese Markets

Chinese and Hong Kong stocks surged as AI startup DeepSeek fueled optimism. The Shanghai Composite and Hang Seng indexes rose, driven by strong performances in tech shares. Partnerships with telecom giants bolster AI sector growth. Meanwhile, easing U.S.-China trade tensions and strong inflation data boost investor sentiment.

Chinese and Hong Kong stock markets experienced a noticeable upswing on Monday, driven by positive sentiment around artificial intelligence startup DeepSeek. The technology sector continued to perform strongly amid better-than-expected inflation figures.

The Shanghai Composite Index saw a modest increase of 0.3% by midday, building on last week's gains. Meanwhile, the Hang Seng Index jumped 1.4%, with the Hang Seng Tech Index hitting a four-month high, spurred by the rise in AI-related shares.

China's large telecom operators, in collaboration with DeepSeek's open source AI model, sparked further investor confidence. Analysts suggest this upward trend could persist until the Two Sessions in March despite market volatility, as trade tensions between the U.S. and China ease.

(With inputs from agencies.)