Optimism in Chinese Markets as AI and Auto Sectors Gain Momentum

Chinese and Hong Kong markets experienced an uptick on Wednesday, fueled by regulatory backing for the automotive sector and renewed enthusiasm surrounding AI-related stocks. Citi analysts have upgraded China equities, noting better earnings trends and structural growth themes as key factors.

At midday, the Shanghai Composite index posted a 0.1% rise, while the CSI300 blue-chip index increased by 0.3%. AI-related shares led the rise, climbing by 1.2%, accompanied by a 1.4% jump in the information technology sector to a near four-month high. This surge follows Nvidia's announcement to boost H20 chip supplies to China, further boosting market sentiment.

Auto stocks inched up 0.6% amidst promises from authorities to curb excessive competition and intense price wars in the EV market. In Hong Kong, the Hang Seng Index also gained 0.1%, buoyed by auto and tech shares. Biotech and healthcare sectors each rallied over 4%. Citi analysts pointed to potential support for domestic demand as an upside catalyst, despite a mixed domestic economic outlook.

(With inputs from agencies.)