Chinese and Hong Kong equity markets experienced a mixed trading session on Thursday, with artificial intelligence and semiconductor stocks climbing while property shares plunged due to fresh debt concerns at developer China Vanke.
AI and Semiconductor Stocks Lead Gains
The Shanghai Composite index advanced by 0.5% to reach 3,883.01 during midday trading, while the blue-chip CSI300 index gained 0.3%. The positive momentum was primarily driven by strong performance in technology sectors, particularly artificial intelligence and semiconductor companies.
The CSI Semiconductor Index and the CSI AI Index both registered gains of approximately 1%, extending their recent recovery trend. Among individual performers, AI chip maker Cambricon Technologies surged as much as 5.6% to hit a two-week peak, while Semiconductor Manufacturing International Corporation (SMIC) jumped up to 3.6%.
Property Sector Tumbles on Vanke Debt Concerns
The property sector faced significant selling pressure after China Vanke announced it was seeking to delay an onshore bond repayment for the first time in its history. Shares of the prominent developer plummeted as much as 8.8% following the announcement.
This development triggered a broader selloff in real estate stocks, with China's CSI 300 real estate index sliding as much as 4.5% to its lowest level since September 2024. The index managed to pare some losses but still closed the morning session down 1.5%.
Broader Market Context and Policy Developments
In Hong Kong, the benchmark Hang Seng Index climbed 0.3%, while the Hang Seng Mainland Property Index remained flat after earlier declining by as much as 2%.
The renewed optimism toward domestic AI sectors was fueled by a report from The Information indicating that regulators have prohibited TikTok owner ByteDance from deploying Nvidia chips in new data centers. Analysts at Macquarie noted that China is going all-in to win its version of the AI race, suggesting potential for extended and accelerated infrastructure policy support for the sector.
On the economic data front, China's industrial profits declined in October after two consecutive months of growth, reflecting ongoing challenges from sluggish domestic demand and export downturn. Meanwhile, Beijing unveiled a new plan to stimulate consumption in the world's second-largest economy, outlining measures that include promoting upgrades of consumer goods in rural areas and supporting sectors such as pets and toys.
