Chinese markets climb as AI and chip shares surge
China's CSI 300 index gained 2.3% over the past day, marking its largest single-day increase since mid-March 2025. The Shanghai Composite rose 1.7%, while Hong Kong's Hang Seng fell 0.4%.
AI and semiconductor companies drove the mainland rally. A gauge tracking AI stocks surged 6.8%. Chip designer Cambricon Technologies climbed 9%. Optical component suppliers Zhongji Innolight and Eoptolink Technology jumped 14% and 13% respectively.
The gains followed strong performance in U.S. cloud and AI stocks earlier this week. Across Asia, tech strength lifted major indexes. Japan, Taiwan and South Korea all rose, with some hitting record highs, amid AI optimism and Fed-cut expectations. Expectations of upcoming U.S. interest rate cuts supported the risk-on sentiment.
At the same time, trading in healthcare and biotech stocks remained volatile after reports emerged about potential U.S. restrictions on Chinese drug imports. Early losses in pharmaceutical names narrowed by market close. Healthcare/biotech gauges fell, with Hong Kong’s Hang Seng Index down 0.4% as drugmakers led losses.
Analysts noted uncertainty around pharmaceutical policy headlines. A brokerage report suggested the draft rules targeting innovative drugs are "unlikely to be implemented in practice" due to practical hurdles and patient access concerns.
Chinese equities have seen multiple rallies in 2025, with AI-related hardware and software companies often leading gains, but the market still continues to face pressure from sellers.
Global enthusiasm around data center spending and AI workloads has increased demand for China's optical components, chip design and server supply-chain companies. Growth, policy and external trade uncertainties remain key concerns for investors.
Regional markets tracked similar themes as investors rotated into technology and AI exposure. The broader rally came amid expectations of easier global financial conditions.
Previously, GNcrypto reported that China plans to triple domestic AI chip production in 2026 as part of a government-backed plan to supply compute power for leading models like DeepSeek.
