China stocks end up on upbeat factory data

SHANGHAI: China’s mainland shares closed up on Tuesday, led by AI and semiconductor stocks, after stronger-than-expected factory activity pointed to resilient demand for high-tech exports.

China’s blue-chip CSI300 Index ended 1.1 percent higher, while the Shanghai Composite Index gained 0.5 percent. The Hong Kong benchmark Hang Seng Index was down 0.6 percent.

Hang Seng Index dropped 9.1 percent for the month, its steepest monthly loss since January 2024, and was down 7.7 percent for the quarter.

The CSI 300 Index was up 1.8 percent and 11.9 percent for the month and quarter, respectively.

The 5G Communication Index was up 4.4 percent, while onshore semiconductor shares rose 3.3 percent. The tech-focused STAR50 Index gained 3.9 percent.

China’s factory activity returned to expansion in June, driven by demand for chips, computers and other AI-related products, as robust export orders and front-loading to the United States to get ahead of possible tariffs later this year offset weakness elsewhere in the economy.

The data eased near-term growth concerns but kept expectations for further policy support intact, UBS analysts said in a note, as recent activity indicators continued to point to an uneven consumer recovery. The investment bank said investors should watch for policy signals from the July Politburo meeting.

Shares of Chinese memory chipmaker GigaDevice Semiconductor fell as much as 7 percent in early trade, while its Hong Kong-listed shares ended 4.3 percent lower, after the company warned of the risk of further tightening in wafer capacity supply from upstream foundry partners.

Tech majors listed in Hong Kong were up 1.8 percent.

China’s stock market has split sharply this year, with AI supply-chain shares rallying to record highs while weak domestic demand weighed on traditional sectors.

Onshore financial shares dropped 1.6 percent, while consumer staple stocks slipped nearly 1 percent.