China stocks rally as Shanghai benchmark tops 4,000 in first New Year trade

Chinese stocks on Monday ended ‍their first trading session of 2026 on a strong note, with the Shanghai ⁠benchmark topping the 4,000-level for the first time in nearly three months, as investors piled into tech sectors while looking past geopolitical tensions. ** At market close, the ‌Shanghai Composite ‌index was up 1.4% at 4,023.42 points. The best single-day gain in nearly four months pushed ‌it above the 4,000 level for the first time since November 14.

** The blue-chip CSI300 index was up 1.9%, its best gain since September.

** The tech sector rallied the broader market higher. Shanghai's tech-focused STAR50 index was up 4.4%.


** CSI Semiconductor surged 5.6% to a three-month high, and artificial intelligence index added 3.2%.

** "Innovation-led growth, ‌particularly in ‍AI and advanced manufacturing, could emerge as new growth ‍engines" despite structural challenges such as property slump and ‌weak income trends, Bank of America analysts said in a note. They see a 10% to 15% room for further multiple expansion for China equities.

** Among other winners, the insurance sector surged 5.5% to a record, and the defense sector climbed 2.1% to the highest level in nearly three years. ** Meanwhile, the energy ‍sector weakened 1.2% as major state firms with investments in Venezuela dropped after the U.S. captured President Nicolas Maduro ‍and said ⁠it would take control ⁠of the South American country.

** "We believe overseas geopolitical disruptions are likely to be temporary emotional shocks that won't derail the upward trend of the spring rally", given ample market liquidity and positive policy signals, analysts at Huatai Securities said in a note. ** In Hong Kong, the Hang Seng Index was largely flat at 26,347.24 after the strong rally on Friday. The Hang Seng Tech Index added 0.1%.