Hong Kong's stock market is expected to extend gains this year, with most banks forecasting the benchmark to surpass the 30,000 level.
In 2025, despite the volatility driven by the Sino-US trade war and rising geopolitical tensions, Hong Kong shares jumped over 27 percent to 25,630, marking the best performance in eight years, while the tech index climbed over 23 percent.
The Hang Seng Index outperformed major European and US indices, but lagged behind South Korea and the Shenzhen stock market.
Triggered by the emergence of the low-cost DeepSeek artificial intelligence model, Hong Kong-listed big tech names rallied this year, said Kenny Ng Lai-yin, securities strategist at Everbright Securities International.
He said the tech heavyweights will continue to advance in value this year, as their prices are lower than those in the US market.
Amid the fierce global AI competition, he believed that Chinese tech stocks would receive a lot of policy support, which would be favorable for their growth.
Beyond the buoyant tech shares, the appreciation of the yuan is expected to become the new driver for the stock market, especially benefiting heavy-asset sectors such as aviation and oil.
The development regarding the Taiwan issue, as well as the trend of the US interest rate under the new Federal Reserve chairman, are also worth watching, he added.
Everbright Securities International estimated that the Hang Seng Index will stand above 30,000 points in 2026, while Haitong International expected the benchmark to jump up to 34,000.
DBS, BOC International, The Bank of East Asia (0023), and HSBC Private Bank forecast the index to be closed between 30,000 and 31,000, and Standard Chartered (2888) predicted that it will rise to the range of 28,000 to 30,000.
Morgan Stanley said the benchmark will reach 27,500 by year-end, while China International Capital Corporation (3908) and Citi set the target at 28,000 to 29,000.
