Shanghai Stocks Rebound as Beijing's AI Drive Sparks Tech Surge

In a turn of events on Thursday, mainland China stocks rebounded, fueled by optimism surrounding Beijing's advances in artificial intelligence, leading to significant gains in tech shares. Conversely, the Hong Kong market extended its losing streak to a third session, burdened by a profit slump from the food delivery company, Meituan.

The Shanghai Composite index closed up 1.14%, bolstered by a blue-chip CSI300 index hike of 1.77%, with the tech-centric STAR Market marking an impressive 7.23% rise. Semiconductor stocks were at the forefront, with a 7.27% increase as investors anticipate China's accelerated development of domestic AI chips, a move seen as reducing reliance on Nvidia.

Chinese competitors SMIC and Cambricon soared, and GF Fund Management removed recently placed investment caps on a tech-focused fund. The rally is supported by institutional investments despite economic sluggishness. Attention now turns to China's government plenum in October for key policy directions, while Meituan's notable profit drop led to the Hang Seng index falling by 0.81%.

(With inputs from agencies.)