Optical, semiconductor stocks lift China A-shares; HK shares dip

HONG KONG: China stocks extended gains on Wednesday, boosted by a jump in optical and semiconductor stocks on optimism over AI growth.

Hong Kong shares dropped as investors sought hardware opportunities elsewhere. 

At the midday break, China’s blue-chip CSI300 Index climbed 1.6% and the Shanghai Composite Index rose 0.6%.

Hong Kong benchmark Hang Seng was down 1.7%. Hong Kong-listed Chinese internet giants dropped 2.4%.

Telecommunication and semiconductor shares led gains in mainland A-shares, up more than 8.2% and 4.9%, respectively.

Suzhou TFC Optical Communication and optical transceiver giant Zhongji Innolight surged more than 10%, following a strong session by their US peers overnight. This week’s Computex conference in Taipei has further ignited investor enthusiasm for AI supply chain.

Meanwhile, China’s services activity expanded at the fastest pace in three months in May, helped by stronger growth in new business and a rebound in overseas demand, a private-sector survey showed on Wednesday.

Goldman Sachs analysts said in a note on Wednesday that they maintain “overweight” on China A-shares on improving growth outlook and exposure to hardware AI companies.

However, it lowered its weight on Hong Kong shares to medium-weight, given earning concerns over companies outside the hard tech area.

The smaller Shenzhen index was up 1.38%, the startup board ChiNext Composite index was higher by 3.97% and Shanghai’s tech-focused STAR50 index was up 4.78%.

MSCI’s Asia ex-Japan stock index was firmer by 0.17%.‑Reuters