HONG KONG: Chinese shares edged up on Thursday, 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.
At market close, the Shanghai Composite index climbed 0.4% to 3,516.83, and China’s blue-chip CSI300 index was up 0.7%.
Leading gains were AI-related shares that added 1.8% and the info tech sector that jumped 2.1%, as news that Nvidia will ramp up supply of H20 chips to China lifted sentiment.
Auto stocks edged up 1.7% after authorities pledged to regulate the excessive competition and intense price wars in the electric vehicle (EV) industry.
In Hong Kong, the benchmark Hang Seng Index closed flat but held near a four-month high.
The biotech and healthcare sectors rallied more than 5% each after US President Donald Trump dialled down his harsh tone towards China, offering fresh optimism about the trade deal prospects.
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.
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, the analysts said.
“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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