SHANGHAI: China stocks rose to one-month highs on Monday, while Hong Kong shares also gained, recouping losses recorded since the outbreak of the Iran war on February 28, as signs of China’s economic resilience and fresh market-friendly policies lifted sentiment.
Regional markets also rebounded, but with uncertainty lingering around US-Iran talks, some caution that markets may be too complacent.
The blue-chip CSI300 Index rose 0.6 percent and the Shanghai Composite Index gained 0.8 percent, both hitting one-month highs. Shenzhen’s Chinext Composite Index flirted with record highs.
Hong Kong’s Hang Seng advanced 0.8 percent, joining a rally in Asian markets.
Investors remain optimistic toward a US-Iran deal, even as concerns grew on Monday that the ceasefire might not hold after the US said it had seized an Iranian cargo ship that tried to run its blockade and Iran vowed to retaliate.
“Because the market has become more confident in resolution, developments that are large enough to shake that confidence are likely also to have meaningful market impact,” Goldman Sachs said, cautioning against downside tail risks.
Orient Securities pointed to investment opportunities in China’s manufacturing sector.
“In the backdrop of unprecedented demand for energy security, China’s globally competitive new energy sector is undoubtedly the core investment theme,” the brokerage said in a report.
Reflecting economic resilience, China on Monday left benchmark loan prime rates unchanged for the 11th consecutive month in April, following solid economic growth at the start of the year.
China’s securities regulator on Friday broadened the types of strategic investors in companies’ additional share sales, revamped fund managers’ incentive system and cracked down on illegal share sales by major shareholders.
Technology shares, including satellite, electronics and chipmaking, led gains in China on Monday.
Artificial Intelligence stocks rose after news that Chinese AI startup DeepSeek is in talks with investors to raise at least USD300 million at a valuation of USD10 billion.
Robotics stocks rose after a half-marathon race on Sunday highlighted the sector’s rapid technical advances.
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