SHANGHAI: China stocks ended roughly flat on Thursday as investors weighed fresh evidence of economic recovery against simmering Sino-US tensions, while chipmakers continued to soar. Hong Kong shares rose, led by healthcare and materials shares.
China’s blue-chip CSI300 Index fell 0.2%, while the Shanghai Composite Index was little changed.
Both Hong Kong’s Hang Seng Index and the China Enterprises Index rose 0.3%. Tech stocks traded in Hong Kong gained 0.1%.
Hong Kong’s healthcare stocks jumped 2.6% while materials shares rose 2.4%.
China’s services activity in March revved up at the quickest pace in 2-1/2 years on robust new orders and job creation and a consumption-led post-COVID recovery, a private-sector survey showed on Thursday.
But the optimism was counteracted by a flare-up in Sino-U.S tensions as US House Speaker Kevin McCarthy hosted Taiwanese President Tsai Ing-wen in California on Wednesday, and stressed the need to accelerate arms deliveries to Taiwan in the face of rising threats from China.
An index tracking China’s defence stocks jumped 2.1% as maritime authorities in China’s Fujian province launched a three-day special patrol and inspection operation in the Taiwan Strait.
Meanwhile, investors closely monitor the China visits by EU chief Ursula von der Leyen and French President Emmanuel Macron, which could set a course for future relations after years of strained ties.
“China could at least be a relative ‘safe haven’ given its growth premium, financial soundness, policy discipline and the new political economy cycle,” Citi said in a note to clients. “We still believe the party of capital inflows is not over yet.”
China’s AI-related stocks remain buoyant, despite growing bubble concerns following price surges over the past month on the back of the ChatGPT mania.
The AI index rose 0.1%, flirting with fresh 14-month highs, while China’s chipmaking index surged 3.5% to the highest level since January 2022.
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