On Monday (April 29), the benchmark stock index in Hong Kong surged significantly, nearing a bull market, continuing its recovery from near five-year lows reached earlier this year.

The Hang Seng Index rose 1.5% at 23:47 ET (03:47 GMT) to reach 17,916.0 points, marking a new high in five months. The index has risen by over 20% from its mid-January lows, and the closing levels at the current point indicate that the market has entered a bull market.

Leading the gains were technology and real estate companies. Positive earnings data from U.S. tech giants Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc, the parent company of Google (NASDAQ: GOOGL), boosted sentiment towards the tech sector, increasing hopes that demand for artificial intelligence could boost industry valuations in the coming months.

Some positive earnings also lifted market sentiment. AIA Group Limited (HK: 1299) rose by as much as 10% after reporting growth in first-quarter earnings and adding $2 billion to its stock buyback plan.

The Hang Seng Index has been rising for the past ten days, driven by optimistic expectations for the recovery of the Chinese economy and additional stimulus measures from Beijing. However, local Hong Kong stocks continue to be affected by negative signals regarding Chinese economic growth or regulatory disputes with the United States.

Despite a 6.5% increase in the Hang Seng Index in 2024, it has suffered significant declines over the past three years due to the stagnation of the Chinese economic recovery, allowing for some local stocks to be bought at low prices. However, foreign capital inflows have declined significantly in recent years due to ongoing concerns about a slowdown in the Chinese economy, yet Hong Kong remains a crucial gateway to mainland China.