SHANGHAI: Tech shares rallied in mainland China on Thursday, as investors cheered the securities regulator’s pledge to support innovation, while Hong Kong stocks fell on US rate hike prospects.
China on Wednesday said it would support listings of startups in “future industries” such as quantum technology, nuclear fusion and brain-computer interfaces.
Tech-focused STAR 50 leapt 3.8 percent to notch a record close, while start-up board ChiNext Composite index rose 2.1 percent.
“A new wave of technological revolution, led by AI, is being integrated into production and daily life at an unprecedented pace,” said Wu Qing, chairman of the China Securities Regulatory Commission, at a forum in Shanghai.
The benchmark Shanghai Composite index eased 0.4 percent, while the blue-chip CSI300 index edged 0.2 percent higher.
Stocks in traditional sectors sold off. A sub-index tracking banking shares lost 2.6 percent, while property shares dropped 2.8 percent.
In Hong Kong, the benchmark Hang Seng Index lost 1.6 percent, while tech shares slipped 1.4 percent.
The financial hub’s markets tracked losses on Wall Street, as investors bet that the Federal Reserve’s next move would be a rate hike.
The Fed held rates steady on Wednesday, but new quarterly projections showed nine of 19 Fed officials anticipating a hike by the end of 2026.
Fed funds futures market now prices in an 83 percent chance of tightening in December, according to CME FedWatch, with strong retail sales reading adding to hawkish bets.
“We expect Asian markets to initially follow the US in reacting to the risk of higher rates,” said Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management.
“That said, with a US-Iran deal on the horizon, investors would interpret the Fed’s hawkishness as precautionary, which should help reverse the US dollar’s strength and be more supportive of Asian equities.”