China stocks rise on semiconductor gains despite weaker economic data

Chinese equities ended higher on Wednesday, extending gains from the previous session as strong buying in semiconductor stocks lifted market sentiment. The Shanghai Composite Index rose 1.47% to close at 3,878.4, its highest level in nearly two weeks, while the Shenzhen Component gained 1.86% to 14,144.2, reaching a more than one-week high.

Chipmakers led the rally after reports that South Korean technology giants Samsung Electronics and SK Hynix are assessing chipmaking equipment from Chinese supplier AMEC for possible use at their factories in China. The move comes amid concerns about tighter US export restrictions on advanced semiconductor technologies. Shares of SMIC climbed 3.59%, Hua Hong Semiconductor advanced 6.56%, and GigaDevice surged 8.26%.

However, AI-related optical module stocks came under pressure following reports that the US is preparing restrictions on imports of next-generation Chinese data-centre components. As a result, Zhongji Innolight fell 7.27%, while Eoptolink Technology declined 5.29%.

On the economic front, investor sentiment was tempered by weaker business activity data. A private survey showed that China?s Composite PMI dropped to a one-year low in July. The manufacturing PMI slipped to a four-month low, while the services PMI eased to its weakest level in nearly two years, pointing to slower momentum in the economy.

Powered by Capital Market - Live News