HONG KONG: China and Hong Kong stocks jumped on Monday, led by technology shares as chipmakers rallied on the back of strong earnings, while consumption and liquor shares weakened.
At market close, the Shanghai Composite index was up 1.4 percent at 3,982.65 points, a five-week high. China’s blue-chip CSI 300 index was up 1.6 percent.
Tech sector led gains, with the start-up board ChiNext Composite index higher by 3.1 percent and Shanghai’s tech-focused STAR 50 index up 4.1 percent.
The CSI Semiconductor Index rallied 5 percent and the AI Index added 3.3 percent. Memory chip maker CXMT surged 12 percent, while Shenzhen China Micro Semiconductor surged 16.8 percent after the company reported a nearly 100 percent jump in profit for the first half.
Limiting gains, the CSI Liquor Index fell 2.7 percent, with market heavyweight Kweichow Moutai down 3.6 percent after a profit drop. The consumer staples sector weakened 2.4 percent.
A slew of data on Monday showed China’s economy lost momentum at the start of the second half, with industrial output and retail sales slowing. This follows July bank loans data late last week that showed a record contraction as credit demand faltered.
“The prevailing market view is that the economy in July showed a structural pattern of resilient external demand but insufficient recovery in domestic demand, leaving broad-based market gains without fundamental support,” analysts at Nanhua Futures said in a note.
The market’s pricing focus may shift to actual earnings performance, resulting in range-bound consolidation and rotation among individual sectors, they added.
In Hong Kong, the benchmark Hang Seng Index was up 1.3 percent and the Hang Seng Tech Index added 1.6 percent.
Around the region, shares drifted sideways as investors kept a wary eye on oil prices, which inched higher on Monday as US-Iran peace talks stalled.
Iran called on the US to accept defeat on Saturday, while President Donald Trump blasted Tehran as “very evil” and told Americans to prepare for continued high fuel prices as a result of the war.