China stocks rebound as chipmaker selloff lures bargain hunters; Hong Kong steady

SHANGHAI: China stocks bounced on Tuesday, while Hong Kong shares steadied, as bargain hunters pounced on battered chipmakers following Monday’s rout, with sentiment supported by an overnight rebound on Wall Street.

The large-cap CSI300 Index rose 1.9% while the Shanghai Composite Index gained 1.3%. Both gauges slumped to two-month lows on Monday.

In Hong Kong, the Hang Seng Index ended down 0.4%.

Asia markets rallied after Wall Street saw some support from a bounce in technology stocks.

China’s stronger-than-expected trade data, and news that Iran and Israel had halted attacks on each other also aided sentiment.

“Valuation and risks in AI stocks are rising, but we’re not yet entering the 2000-style bubble burst,” Guangfa Securities said in a report. “The AI sector is being supported by real capital expenditure and profit.”

Some see the recent selloff in China’s tech stocks as a good buying opportunity.

Investor sentiment was also buoyed by news that ChatGPT maker OpenAI has confidentially filed for a U.S. initial public offering, joining rival Anthropic in a push toward the stock market.

China’s STAR Semiconductor Index surged 8% on Tuesday, while the CSI Semiconductor Industry Index jumped 6%.

The CSI Artificial Intelligence Index gained 3.4% and Hong Kong-listed chip-makers also rebounded sharply.

Investors largely ignored news that the U.S. on Monday added Chinese tech firms Alibaba and Baidu as well as automaker BYD to a list of companies it believes are aiding Beijing’s military.

Energy shares in both China and Hong Kong slumped as oil prices eased amid Middle Eastern developments.