HONG KONG: Chinese and Hong Kong shares edged up on Wednesday, buoyed by regulatory support for the auto sector and renewed optimism in AI-related stocks, while Citi upgraded China equities citing improved earnings trends and structural growth themes.
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At the midday break, the Shanghai Composite index was up 0.1%, and China’s blue-chip CSI300 index was up 0.3%.
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Leading gains were AI-related shares that added 1.2% and the info tech sector that jumped 1.4% to a near four-month high, as news that Nvidia will ramp up supply of H20 chips to China continued to buoy sentiment.
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Auto stocks edged up 0.6% after authorities pledged to regulate the excessive competition and intense price wars in the electric vehicle (EV) industry.
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In Hong Kong, the benchmark Hang Seng Index edged up 0.1%, also lifted by auto and tech shares.
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Meanwhile, the biotech and healthcare sectors rallied more than 4% each.
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Analysts at Citi upgraded China equities to overweight, citing comparatively improved earnings outlook, reasonable valuations, and structural themes such as AI and corporate governance reforms.
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Internet names are among the top picks, as recent headlines about resumed sales of AI chips by US companies to China could be incrementally positive, wrote the analysts.
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“While the domestic economic picture remains mixed, a potential acceleration in support for domestic demand could be an upside catalyst,” they said in a note on Thursday.
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