China stocks rebound as tech shares track broader Asian rally

HONG KONG: China and Hong Kong stocks snapped a two-day slide on Wednesday, as AI-related shares tracked a broader rally across Asian markets following chipmaker SK Hynix’s upbeat earnings.

At the close, China’s blue-chip CSI300 Index and the Shanghai Composite Index were up 0.9 percent.

Hong Kong’s benchmark Hang Seng rose 0.2 percent, while the Hang Seng Tech index jumped 1.4 percent.

South Korean chipmaker SK Hynix reported a more than sevenfold rise in quarterly operating profit, beating expectations and rekindling investor sentiment towards the AI-linked trade.

Among A-shares, optical transceiver firms surged, with Zhongji Innolight and Eoptolink Technology up more than 10 percent and 8 percent, respectively.

Sectors including chip-making, 5G communications and robotics also rallied.

Robot maker Yushu Technology, also known as Unitree, closed 9 percent higher ahead of its first quarterly results after its Shanghai listing.

Adding to the optimism, China’s CXMT plans to start production of HBM3E, an advanced type of high-bandwidth memory chip used with AI processors, Reuters reported, citing sources.

In Hong Kong, an index tracking AI-related firms rose 5 percent.

On the flip side, investors sold liquor stocks on worsening sales. Baijiu maker Wuliangye lost 4 percent after its third-quarter profit dropped 48 percent.

China’s tech shares had come under heavy selling pressure since July amid concerns over AI demand and curbs on Chinese exports.

Weak domestic demand has added to investor caution, fuelling calls for fresh stimulus measures to restore market confidence.

Richard Tang, head equity research analyst for Asia at Julius Baer, said the so-called national team of state-backed funds has clearly stepped up its purchase of A-shares in recent sessions, raising hope that market stabilisation may be in sight.

The smaller Shenzhen index was up 1.98 percent, the start-up board ChiNext Composite index was higher by 3.4 percent and Shanghai’s tech-focused STAR50 index was up 2.45 percent.