HONG KONG: China stocks and Hong Kong shares closed higher on Tuesday, led by semiconductor shares, as optimism over artificial intelligence beneficiaries outweighed worries over a global bond sell-off.
At the close, China’s blue-chip CSI300 Index settled 0.4 percent higher, while the Shanghai Composite Index gained 0.9 percent, both snapping a three-day losing streak.
Hong Kong benchmark Hang Seng rose 0.5 percent.
Semiconductor and electricity stocks led the gains in China A-shares as investors took advantage of a recent pullback to increase holdings of AI related stocks.
Julius Baer maintained its overweight rating on China, the Swiss private bank said in a note on Tuesday.
“The momentum in artificial intelligence infrastructure stocks will likely continue,” said Richard Tang, an equity analyst at the firm.
However, sentiment was partially weighed down by recent surging bond yields which have put pressure on Asian equities.
Geopolitical risks also continue to keep investors on edge. US President Donald Trump said on Monday that he had paused a planned attack against Iran.
China’s rare earth stocks declined 1.5 percent after Australia ordered investors with a China background divest their holdings in a rare earths project.
Meanwhile, investors are still assessing the outcomes of Trump’s China visit last week.
Eugene Hsiao, head of China equity strategy at Macquarie Capital, said investors “expected some hard agreement or tangible thing to come out,” but that didn’t happen.
On the positive side, one thing people are arguably pricing in, is a degree of global stability, he added, as there were no negative surprises either.
In Hong Kong, state-owned oil and gas major CNOOC and internet giant Tencent were the outperformers among index heavyweights, up 3 percent and 2.4 percent respectively.
Standard Chartered Bank’s Hong Kong shares advanced more than 2 percent, as the firm announced plans to achieve higher returns, including through cutting 7,000 roles by 2030.
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