Global Market: Chinese stocks advance on AI, chip rally; Hong Kong shares slip

Chinese mainland stocks climbed on Wednesday, supported by strong gains in artificial intelligence and semiconductor shares, while Hong Kong equities declined as investors booked profits in technology heavyweights, according to Reuters.

The blue-chip CSI300 Index rose 0.7% by the midday break, while the Shanghai Composite Index gained 0.5%. In contrast, Hong Kong's benchmark Hang Seng Index fell 0.8%, weighed down by weakness in major technology stocks.

Technology-related sectors continued to lead the mainland market. The tech-focused STAR50 Index advanced 1.5%, while semiconductor shares surged 3.4%, reflecting sustained investor optimism toward China's AI hardware supply chain despite recent market volatility.


Non-ferrous metal stocks also staged a strong rebound, climbing nearly 5% after lagging the broader market over the past month. Meanwhile, defensive sectors underperformed, with consumer staples falling 0.9% and financial stocks edging down 0.1%.

UBS analysts said they expect the broader A-share market and technology sector earnings to continue improving despite recent sharp fluctuations. The brokerage also noted that the rapid decline in margin financing balances suggests the recent deleveraging cycle in China's equity market may be largely complete.

Chinese equities have experienced significant swings in recent months. Reuters noted that the CSI300 Index rallied 14% between April and June, while the STAR50 Index surged 175% over the same period, driven by enthusiasm surrounding AI and hardware supply chain companies before giving back part of those gains during a correction over the past month.

Hong Kong-listed technology giants came under pressure, with the sector dropping 2.1%. Tencent Holdings led the decline, with its shares falling nearly 6%.

Elsewhere, sportswear retailer Topsports International Holdings plunged more than 23% after Nike announced it would direct consumers to its official sales channels, a move seen as reducing reliance on third-party retailers.

In the primary market, Chinese optical components manufacturer Zhongji Innolight filed plans to raise as much as HK$55.05 billion (around $7 billion) through a Hong Kong listing, according to an exchange filing cited by Reuters. The offering could become Asia's second-largest share sale this year, although the company's Shanghai-listed shares slipped 1.5% during Wednesday's trading.