Chinese Stocks Rally on Growing Tech Bets, Defying Global Selloff

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Chinese Stocks Rally on Growing Tech Bets, Defying Global Selloff.

stock :: 7hrs ago :: source - bloomberg

By Bloomberg News

(Bloomberg) -- Chinese stocks defied a pullback in global markets Wednesday, as optimism about Beijing’s stronger push to achieve technology self-reliance eclipsed concerns over rising geopolitical uncertainties.

The Nasdaq-style STAR 50 Index jumped 3.5% to the highest level since October. The broader onshore benchmark CSI 300 ended the day slightly higher.

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In contrast, an Asian equities gauge dropped as much as 0.8%, after the S&P 500 suffered its steepest loss since October, following President Donald Trump’s threat to impose tariffs on European nations that rejected his proposal to purchase Greenland.

Driving the outperformance of the world’s second-largest stock market was a fresh pledge by Chinese policymakers to accelerate efforts to develop homegrown artificial intelligence and aim for technological breakthroughs. Chinese markets have shown surprising resilience in the past year, with strong exports and policy support for advanced manufacturing and technologies cushioning the blow from tariff tensions.

Across Asia, chip stocks were strong against the backdrop of higher memory prices, but the gains were more pronounced in China. Loongson Technology Corp. jumped 20%, while Hygon Information Technology Co. advanced 13%, both to record highs.

“The strength of chip stocks today seem broad-based and not just about memory price hike,” said Steven Tseng, senior analyst at Bloomberg Intelligence. “I would suspect it’s something to do with the ‘self-sufficiency’ theme in China’s chip supply chain.”

Chinese benchmarks ended the day higher despite signs that authorities want to tame the pace of gains. Exchange-traded funds owned by the national team saw turnover surge to another record. Activity was pronounced in ETFs tracking the small cap CSI 1000 Index, which coincided with a paring of the underlying gauge to close up 0.8%. Regulators tightened margin financing rules earlier — a move seen as aimed at slowing the pace of the bull run.

“Stocks will continue the broader uptrend due to a dearth of assets onshore,” said Chen Shi, a fund manager at Shanghai Jade Stone Investment Management Co. “I think we will see more days like today this year where China is an outperformer globally driven by asset allocation needs.”

--With assistance from April Ma.

(Updates with closing prices and adds details on ETFs in 7th paragraph.)