Scaling forgotten peaks can make even seasoned climbers dizzy. On Wednesday, Hong Kong’s Hang Seng closed above 30,000, a level last breached in 2007. Japan’s Nikkei 225 has recovered to a level not seen since before the 1997 Asian crisis. South Korea’s equity benchmark is also setting records. To assess whether these rallies are sustainable, it pays to look at what is driving them.

A third of Hong Kong’s 40 per cent year-to-date surge is down to one stock: messaging and gaming group Tencent. South Korea’s index is similarly dominated by Samsung, which is selling record amounts of memory chips. Japan’s equity market has benefited from the recovery in global growth as well as its central bank’s easing programme. The country’s Topix benchmark is more balanced, but led by the financial sector — it could benefit from higher US rates, in contrast to other Asian indices.

Rallies based on over-concentration and shrinking liquidity tend to falter. There seems little prospect of the latter in Hong Kong. Goldman Sachs estimates that two-fifths of the $95bn of estimated flows into the territory this year came from the mainland. Assets denominated in Hong Kong dollars, which are pegged to the US currency, provide a natural currency hedge for renminbi investors. The Stock Connect programme, set up in 2014, facilitates these flows — and financial regulators’ actions against domestic property buyers and risky fixed-income products will only funnel more cash down the Stock Connect pipes.