China, HK stocks end higher on hopes of continued US-Iran talks

SHANGHAI: China and Hong Kong stocks ended higher on Tuesday, led by artificial intelligence and gold-related shares as sentiment was lifted by hopes of continued negotiations between the US and Iran, despite China’s exports showing signs of weakness in March.

China’s blue-chip CSI300 Index closed 1.2 percent higher, while the Shanghai Composite Index gained 1 percent. Hong Kong’s benchmark Hang Seng was up 0.8 percent.

Negotiating teams from the US and Iran could return to Islamabad this week, four sources said on Tuesday, days after talks between the two countries ended in the Pakistani capital without a breakthrough.

China’s export engine slowed in March as buyers chasing an AI-fuelled future ran into the hard reality of war in the Middle East, which has sparked an energy shock and complicated Beijing’s push to keep growth on track.

Onshore AI shares rose 2.2 percent, while semiconductor stocks climbed 2.6 percent.

Non-ferrous metal shares gained 2 percent, while materials listed offshore were up 2.1 percent.

Tech giants traded in Hong Kong rose 0.6 percent.

UBS China equity strategist Meng Lei expects ETFs, leveraged funds, private funds, and insurance money to be the key sources of new capital in onshore shares.

Given near-term uncertainty from geopolitical risks, he recommended a balanced allocation between growth and value and between large and small caps.

Once markets stabilize, he favors growth and cyclical styles, citing a “slow-bull” backdrop supportive of growth, and potentially positive PPI and improving industrial profit growth as tailwinds for cyclicals.

Among individual stocks, Pop Mart shares jumped 6.5 percent after Chinese value investor Duan Yongping signalled interest in the stock in a post on his social platform.