China, Hong Kong stocks gain as US-Iran framework boosts sentiment

HONG KONG: China and Hong Kong stocks ended higher on Monday, as a tentative peace deal between the US and Iran promised to open the Strait of Hormuz, easing concerns over soaring energy prices. China’s blue-chip CSI300 Index gained 2.4 percent, while the Shanghai Composite Index climbed 1.6 percent. Hong Kong benchmark Hang Seng closed up 0.5 percent.

The market gain tracked a broader rally in Asian stocks, while the US dollar slipped and oil prices tumbled.

“Risk sentiment improved sharply on Monday following the weekend announcement of a US-Iran peace agreement,” Wee Khoon Chong, APAC macro strategist at BNY, said in a note. “The development is supporting equities and AI-led equity optimism remains intact.” With oil prices falling and the US Federal Reserve’s interest rate decision scheduled for this week, market uncertainty will ease, and China stocks are likely to begin a new upward cycle, analysts at Guotai Haitong Securities said in a note.

Chipmakers and AI models led the gains, while energy, property and consumer stocks were among the biggest drags.

Hong Kong’s information technology sector jumped 7 percent, with InnoScience Technology and Hua Hong Grace Semiconductor up 17 percent and 10 percent each.

AI agent developer Knowledge Alts, known as Zhipu AI, surged more than 30 percent after the firm announced full open access to its latest model.

In mainland A-shares, 5G Communications and AI-related stocks outperformed, up 6.9 percent and 5.7 percent respectively.

The smaller Shenzhen index was up 3.42 percent, the start-up board ChiNext Composite index was higher by 5.31 percent and Shanghai’s tech-focused STAR50 index was up 5.12 percent.