China stocks jump most since March, AI-linked shares lead

Chinese stocks rallied on Thursday, with gains led by shares of companies that are among the major beneficiaries of the nation's push for homegrown technology.

The CSI 300 Index, a benchmark of onshore equities, jumped 2.3% to cap its biggest advance since mid-March. Shares of artificial intelligence chip designer Hygon Information Technology Co. surged 20% to be the top gainers on the gauge. Those of peer Cambricon Technologies Corp., known as China's "little Nvidia," climbed 9%.

Thursday's gains point to a likely resumption of China's liquidity-driven rally after a brief period of consolidation. The CSI 300 is now up 2% for this week after losing 0.8% over the previous five sessions. Before that, the benchmark had climbed in nine of the previous 10 weeks as cash-rich investors piled into stocks for lack of better alternatives.


"Retail investors seem to be back in the driver's seat," said Homin Lee, a senior macro strategist at Lombard Odier Singapore. "Onshore retail sentiment remains pretty strong in terms of new account opening, margin trading, and fund subscriptions."

The mainland's smaller chip-focused index, better known as Star50, jumped 5.3% while the tech-heavy ChiNext also climbed more than 5%. Shares of optical transceiver makers Eoptolink Technology Inc. and Zhongji Innolight Co. soared more than 12%, with some market watchers also pointing to Oracle Corp.'s aggressive outlook as a reason for the optimism for the tech sector.

The gains came as tech giant Alibaba Group Holding seeks to raise $3.17 billion in an offering of zero-coupon convertible notes that's set to be the year's biggest. The Hangzhou-based company said earlier this year it will spend $53 billion over three years on AI infrastructure such as data centres in an ambitious bid to become a leader in AI. Thursday's rally is "mainly led by AI thematic sectors, especially for the computing infrastructure ones," said Jason Chan, senior investment strategist at Bank of East Asia in Hong Kong. "Market sentiment remains robust in this theme."