Hong Kong stocks began 2026 with a significant rise, reaching a one-month high driven by a rally in the technology and artificial intelligence (AI) sectors. This surge was fueled by renewed optimism in China's AI capabilities, highlighted by a paper from DeepSeek on cheaper AI development and a strong debut by AI chip designer Shanghai Biren Technology. Analysts anticipate AI themes will continue to dominate the market, with companies like Hua Hong Semiconductor and Baidu also experiencing substantial gains.