HONG KONG: China stocks closed higher on Wednesday with defensive and new energy sectors leading gains, joining a choppy relief rally in the region despite Middle East uncertainties.
As of market close, the Shanghai Composite index edged up 0.3 percent at 4,133.43 points, while the blue-chip CSI300 index added 0.6 percent.
Leading markets higher, the CSI New Energy Index rallied 2.8 percent as investors bet geopolitical tensions driving energy prices higher will boost the sector.
Battery giant CATL extended its rally on profit beat, rising as much as 7.2 percent to a near four-month high before closing up 5.4 percent.
The financial sector sub-index added 0.7 percent and the CSI Banks Index gained 0.9 percent, benefiting from defensive plays amid ongoing market volatilities.
Shares in the broader Asia region bounced as oil prices eased following International Energy Agency’s reported plan for a record release of oil reserves. Still, sentiment remained cautious as contradictory signals from Middle East left investors struggling to gauge its impact on global inflation and growth.
“The Iran conflict appears to be de-escalating and risk assets have continued to rally across the board. Chinese stock indices are riding this wave,” analysts at Huatai Futures wrote in a note.
“But they’re still held back by weak fundamentals and a lack of positive drivers. We expect the markets to trade sideways with some corrective moves rather than breaking higher.”
In Hong Kong, the benchmark Hang Seng Index gave up earlier gains to close down 0.2 percent.
The Hang Seng Artificial Intelligence Theme Index lost 0.3 percent and the Hang Seng Tech Index weakened 0.1 percent, after China warns state-owned firms and government agencies against OpenClaw AI for security concerns.
EV maker NIO rallied more than 14 percent to the highest level since November, after posting first-ever net profit for the last quarter.
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