China shares edge up on US-Iran peace deal hopes, Nvidia-fuelled chip rally

HONG KONG: China stocks edged higher on Thursday, joining a broader rally in the region, as hopes of a U.S.-Iran peace deal lifted risk appetite, while Nvidia’s stellar earnings boosted chip shares.

China’s blue-chip CSI300 index was up 0.6% by the lunch break, while the Shanghai Composite index was flat at 4,162.37 points.

In Hong Kong, the benchmark Hang Seng Index was largely flat at 25,648.28.

U.S. President Donald Trump said on Wednesday that negotiations with Iran were in the final stage, suggesting he was prepared to wait a few days to “get the right answers” from Tehran, but also warned of renewed attacks if it did not agree to a deal.

“The easing of the U.S.-Iran conflict and the drop in oil prices may boost market sentiment and drive a rebound in equity indices,” analysts at Nanhua Futures said in a note.

Meanwhile, tech optimism boosted by Nvidia’s blockbuster growth could continue driving out-performance in small- and mid-cap indexes, they said.

The semiconductor sector surged before pulling back. The CSI All-Share Semiconductor Products and Equipment Index rose as much as 3.2% to a record before turning lower 0.4% by midday break.

Chip maker Naura Technology hit the daily 10% limit-up and notched a record high before closing the morning session up 6.1%.

“Against a backdrop of ample liquidity and broadly improving earnings, our strategy is to focus on high-quality

growth and selective stock-picking,“ said Xiaoning Zhang, China equity strategist at J.P. Morgan.

“From a broad market perspective, we remain positive and optimistic,” she said, forecasting a year-end target of 5,200 for the CSI 300 Index in the base case.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 2.86%, while Japan’s Nikkei index was up 3.72%.