HONG KONG: Chinese shares rose on Wednesday as investors piled into artificial intelligence-related stocks after the government issued a guideline to accelerate the AI adoption in various fields.
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China’s blue-chip CSI300 Index advanced 0.7% by the lunch break, and the Shanghai Composite Index gained 0.3%.
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Hong Kong benchmark Hang Seng was largely flat. The Hang Seng Tech rose 0.6%.
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The State Council released an “AI Plus” initiative on late Tuesday to bolster the application of AI in different areas such as technology and consumption.
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AI, cloud computing and semiconductor shares rallied broadly on the back of policy stimulus.
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CSI AI Index jumped 5.5% by midday, hitting a record high. Semiconductor stocks gained 4%.
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“This development represents a powerful catalyst for growth stocks and related subsectors,” investment manager KraneShares said in a note.
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Shares of Cambricon Technologies jumped over 8% to another record high after the AI chip maker swung to profit in the first half.
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Meanwhile, broader economy remains challenging. Official data shows China’s industrial profits fell for a third consecutive month in July on demand and deflation woes.
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“The lifespan of this equity rally remains uncertain,” analysts at UBS Global Wealth Management chief investment office said in a note.
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Given the deteriorating macro conditions, investors may shift focus to the Fourth Plenary in October, awaiting new measures to support the economy.
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The smaller Shenzhen index was up 0.8%, the start-up board ChiNext Composite index was higher by 2.41% and Shanghai’s tech-focused STAR50 index was up 4.16%.
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The rise in China stocks was also helped by the currency strength.
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China’s yuan briefly hit its highest in nearly 10 months against the dollar on Wednesday, thanks to strong guidance fix and weaker dollar.
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