China, Hong Kong stocks advance as US-Iran framework boosts sentiment

HONG KONG: China and Hong Kong stocks rose on Monday, as a tentative peace deal between the US and Iran promised to open the Strait of Hormuz, easing concerns over soaring energy prices.

China’s blue-chip CSI300 Index gained 1.5% by the lunch break, while the Shanghai Composite Index climbed 0.9%.

Hong Kong benchmark Hang Seng was up 0.5%.

The market gain tracks a broader rally in Asian stocks, while the US dollar slipped and oil prices tumbled. “Risk sentiment improved sharply on Monday following the weekend announcement of a US-Iran peace agreement,” Wee Khoon Chong, APAC Macro Strategist at BNY, said in a note.

“The development is supporting equities and AI-led equity optimism remains intact.”

Chipmakers and AI models led the gains, while consumer and property stocks were among the biggest drags.

Hong Kong’s information technology sector jumped 6% by midday, with Hua Hong Grace Semiconductor and InnoScience Technology gaining 11% each.

AI agent developer Knowledge Alts, known as Zhipu AI, surged 28% after the firm announced the full open access to its latest model.

In mainland A-shares, 5G Communications and AI-related stocks outperformed, up 5.5% and 4.6% respectively.

The smaller Shenzhen index was up 2.3%, the start-up board ChiNext Composite index was higher by 3.66% and Shanghai’s tech-focused STAR50 index was up 3.62%. Beyond AI-driven demand and strong exports, however, China’s economy still faces challenges, analysts said.

The country’s new bank lending rose less than expected in May after contracting the previous month, as a prolonged property downturn continued to weigh on household borrowing. ‑Reuters