HONG KONG: China and Hong Kong stocks rebounded on Wednesday as investors returned to buying technology shares after the previous day’s global selloff.
By the close, China’s blue-chip CSI300 Index was up 0.5 percent, while the Shanghai Composite Index edged up 0.1 percent.
Hong Kong’s benchmark Hang Seng inched up 0.3 percent.
Shanghai’s tech-focused STAR50 index jumped 3.8 percent to a new all-time high.
Technology and semiconductor stocks sold off globally on Tuesday, with South Korea’s Kospi plunging nearly 10 percent.
“We see recent market volatility as a cooling down rather than a turning point,” Huaan Securities analysts said in a note, adding that the correction presents a good opportunity for investors to add exposure to the AI supply chain.
Semiconductors and broader AI supply chain stocks led gains, suggesting renewed investor appetite for the sector.
CSI semiconductor index jumped more than 5 percent and the AI industry index advanced 2.9 percent; Hong Kong listed biotech firms gained 2.2 percent.
Real estate and Hong Kong-listed brokerage stocks underperformed, losing 3.6 percent and 2.6 percent, respectively.
Some analysts remain upbeat about the AI cycle.
China Asset Management said AI will continue to be the core investment theme in the second half of the year, adding that bearish views on the sector were not fully supported.
A rotation into traditional investment sectors, such as consumption, would require a combination of a strong economy, faster inflation and signs of peaking demand for AI, analysts at the fund said.
Supporting the focus on technology, Chinese Premier Li Qiang in a speech at the World Economic Forum summit said the country will continue to accelerate large-scale application of new technologies.
Separately, the yuan slid to one-month low on Wednesday, pressured by a stronger greenback, as investors positioned for potential Federal Reserve rate hikes.
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