Hang Seng surges on China stimulus bets and AI gains

Hong Kong's Hang Seng Index surged on Monday, climbing above the 25,000 level for the first time since early June as investors bet that Beijing will roll out fresh stimulus following a string of weak economic data, while a flurry of AI developments boosted technology shares across the board.

Stimulus Expectations Drive Broad Rally

The rally came less than a week after data showed China's economy grew just 4.3% in the second quarter, its weakest expansion in more than three years and below the lower end of Beijing's 4.5% to 5% full-year target range. The GDP miss, combined with sluggish retail sales growth of just 1% in June and a continued slump in fixed-asset investment, has intensified market expectations that policymakers will accelerate fiscal spending in the second half of the year.economyglobal+2

According to MarketScreener, Hong Kong stocks rallied Monday on expectations of additional policy support from Beijing following the weaker-than-expected economic data. Trading Economics data showed the index rose to 25,113 points, gaining 2.24% from the previous session.marketscreener+1

AI Catalysts Amplify Tech Gains

Technology names led the advance. Alibaba ↘ 4.74% shares rose as much as 5.4% after the company launched a preview of its flagship Qwen3.8 Max AI model, according to Bloomberg. The upgraded model marks Alibaba's latest bid to stay competitive in China's rapidly intensifying AI race.bloomberg

Adding further fuel, Bloomberg reported over the weekend that Moonshot AI is preparing to list in Hong Kong within six months at a valuation exceeding $30 billion. The Beijing-based startup, whose Kimi K3 model recently matched leading U.S. frontier labs on key benchmarks, has distributed a shareholder resolution seeking investor approval and held talks with China International Capital Corp. and Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.38% about working on the offering.bloomberg+2

Rebound From June Lows

The index has staged a sharp recovery since hitting lows near 22,500 in late June, buoyed by a combination of easing geopolitical tensions and growing conviction that Beijing cannot afford to stand pat. Reuters reported that while first-half growth of 4.7% remains within target, reducing urgency for aggressive intervention, the second-quarter miss has nonetheless raised the stakes for policymakers heading into the fall. Morgan Stanley has already lowered its full-year growth forecast to 4.6% from 4.8%.reuters+1