HONG KONG: Chinese and Hong Kong stocks gained on Monday, recovering from last week’s sharp declines, as defence and tech stocks led gains.
At market close, the Shanghai Composite index was up 0.7% at 3,583.31 points, recovering from losses in earlier trades. The blue-chip CSI300 index jumped 0.4%.
The defence sector led the onshore market higher with a 2.9% gain. The semiconductor sector gained 1% and AI-related stocks added 0.9%.
The rebound on Monday came after markets last week booked their steepest losses since April. The bullish trend for Chinese equities has started to show signs of slowing as the much anticipated Politburo meeting and tariff negotiations with the US both failed to deliver positive surprises.
“Market sentiment is becoming more volatile as positive catalysts are losing momentum,” Citic Securities said in a note, adding that investors might shift focus to defensive sectors for shelter or industries with clear growth trajectories.
In Hong Kong, the benchmark Hang Seng Index was up 0.9% at 24,733.45, also recovering from last week’s loss.
The tech sector jumped 1.6% and AI-related shares added 1.7%, leading markets higher.
Domestic ship stocks continued to rally on Monday after Beijing raised concerns over potential security risks in Nvidia’s H20 chip.
Looking ahead, markets are awaiting new developments on the trade truce between China and the US that expires on August 12. US Treasury Secretary Scott Bessent said Washington has the makings of a deal and was “optimistic” about the path forward.
“Given rising uncertainties in the foreign market, especially in the US where Trump’s intervention in economic reporting undermines the efficacy of policies, both on- and off-shore Chinese markets will likely be under pressure in the near term,” Hong Hao, chief investment officer at Lotus Asset Management, said in a note.