Shanghai stock benchmark reclaims 4,000 level on domestic chip optimism

HONG KONG: Shanghai’s benchmark stock index reclaimed the psychologically important 4,000 level on Thursday, as optimism over tech self-sufficiency boosted semiconductor and artificial intelligence-related shares.

• At the midday break, the Shanghai Composite index was up 0.9% at 4,004.25 points. The blue-chip CSI300 index was up 1.3%.

• The Chinese government has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made AI chips, Reuters reported.

• This could be one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure and achieve its quest for AI chip self-sufficiency.

• Tech sectors led the gains. The CSI Semiconductor Industry Index rallied more than 4%, with China’s top chip maker SMIC up 3.9% and Cambricon Technologies rising more than 6%.

• The CSI AI sector index and the info tech sector both gained roughly 2%.

• “Fresh optimism about China’s chip self-sufficiency and upcoming technological breakthroughs would continue to support the entire sector’s performance despite the rich valuation. There’s more upside to go,” said Kenny Ng Lai-yin, securities strategist at China Everbright Securities International.

• In Hong Kong, the benchmark Hang Seng Index was up 1.6% at 26,361.40. The Hang Seng Tech Index jumped more than 2%.

• Cathay Pacific Airways touched a three-month high after announcing it was buying back the entire remaining stake from Qatar Airways.

• Pony AI and WeRide slid as the Chinese autonomous-driving developers started trading in Hong Kong.

• Investors are also awaiting China’s October trade data, due on Friday. Forecasts compiled by Reuters show that exports denominated in US dollars likely slowed to a year-on-year growth rate of 3.0%.