HONG KONG: China stocks extended gains on Wednesday, boosted by a jump in optical and semiconductor stocks on optimism over AI growth. Hong Kong shares dropped as investors sought hardware opportunities elsewhere.
At the close, China’s blue-chip CSI300 Index climbed 0.5 percent and the Shanghai Composite Index rose 0.2 percent.
Hong Kong benchmark Hang Seng was down 1.6 percent. Hong Kong-listed Chinese internet giants dropped 2.7 percent.
Telecommunication and semiconductor shares led gains in mainland A-shares, up 4.9 percent and 2.6 percent, respectively.
Suzhou TFC Optical Communication surged more than 8 percent, while optical transceiver giant Zhongji Innolight went up 7 percent, following a strong session by their US peers overnight.
This week’s Computex conference in Taipei has further ignited investor enthusiasm for AI supply chain.
Meanwhile, China’s services activity expanded at the fastest pace in three months in May, helped by stronger growth in new business and a rebound in overseas demand, a private-sector survey showed on Wednesday.
Goldman Sachs analysts said in a note on Wednesday that they maintain “overweight” on China A-shares on improving growth outlook and exposure to hardware AI companies.
However, it lowered its weight on Hong Kong shares to medium-weight, given earning concerns over companies outside the hard tech area.
Geopolitical tensions have also put some pressure on the market.
The US on Tuesday proposed imposing additional duties of 10 percent or 12.5 percent on imports from the 60 economies, including China, after determining their failures to curb trade in goods made with forced labor are unreasonable and restrict US commerce.
The smaller Shenzhen index ended up 0.28 percent and the startup board ChiNext Composite index climbed 1.655 percent.