SHANGHAI: China and Hong Kong stocks rose on Wednesday, buoyed by overnight strength on Wall Street and Alibaba’s plan to keep investing “aggressively” in artificial intelligence.
China‘s blue-chip CSI300 Index climbed 0.8 per cent by the lunch break, while the Shanghai Composite Index gained 0.1 per cent. Hong Kong’s benchmark Hang Seng Index was up 0.5 per cent, led by tech shares.
Wall Street extended its rally on Tuesday as a spate of economic data appeared to support the case for a December interest rate cut by the US Federal Reserve.
Sentiment was also aided by Alibaba’s forecast-beating quarterly revenue, and the e-commerce giant’s vow to invest in AI infrastructure “aggressively”.
UBS Asset Management said Chinese equities remain attractively valued, and with continued macro upside.
“We are far from overheated — the next stage for Chinese equities will be driven by fundamentals,” said Bin Shi, head of China Equities at UBS AM. “All the market performance so far has been achieved without a very strong economy — if the economy cooperates, there’s more upside ahead.”
“We see China is turning a new page – growth underpinned by new drivers like AI,” said Jade Fu, portfolio manager at UBS AM.
The CSI Artificial Intelligence Index surged 4.2 per cent, the CSI Cloud computing Big data Index leapt 3.8 per cent and the STAR Chip Index jumped 2.3 per cent.
In Hong Kong, biotech, AI and automobile stocks led the gains.
“We continue to highlight the structural improvements in the Chinese equity market landscape to global investors with strong conviction that they will continue,” Morgan Stanley equity strategist Laura Wang said in a note.
Improvements in China include better corporate governance, friendlier business environment for the private sector, reduced Sino-US tensions and high confidence in Beijing’s determination to cushion against a significant economic downturn, Wang said.
© New Straits Times Press (M) Bhd
