• Hang Seng Tech Index eyes highest close since February 2022

• Investors are flocking to Chinese tech shares on DeepSeek hype

Traders’ rush to buy Chinese technology stocks for their artificial intelligence potential has put the Hang Seng Tech Index on course for its highest level since the nation’s Covid-era reopening rally.

The gauge tracking Chinese technology companies listed in Hong Kong rose as much as 2.3% on Thursday, poised for its highest close since February 2022. Kuaishou Technology, Bilibili Inc and Baidu Inc were among the top gainers.

The rise of Chinese AI startup DeepSeek has sparked a hunt for possible service and application beneficiaries from the country’s advancement in large language models, fueling a rally in cheaply-valued tech shares. The index currently trades at 17.4 times forward multiples, still below its five-year average of 24.5 times.

“Re-rating opportunities come when market reassess China’s innovative capabilities and corporate earnings growth following the AI breakthrough,” Raymond Ma, Invesco’s chief investment officer for mainland China and Hong Kong, wrote in a note. “There is a strong case for potential re-rating, especially for Hong Kong-listed Chinese stocks, in which the valuation is much more attractive.”