Chinese stocks experienced a significant surge, mirroring gains in global markets driven by renewed optimism in artificial intelligence. This rally was primarily fuelled by companies poised to benefit from China's focus on developing domestic technology. Semiconductor companies experienced strong gains, reversing earlier losses in the Shanghai Composite Index, which closed 1.65% higher. The ChiNext Price Index also saw substantial growth, closing above 3000 for the first time since January 2022.
Oracle's recent multi-billion dollar contract wins have boosted confidence in the AI sector, easing concerns about valuations. AI chip designer Cambricon Technologies saw its shares jump as much as 13% in Shanghai, while SMIC climbed by up to 8.6%. Hygon Information Technology also surged by its daily permissible limit of 20%. These gains reflect investor confidence in the continued demand for AI-driven cloud computing and China's ongoing efforts to bolster its domestic chip production capabilities.
