China stocks gain after 3 days as techs shine

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SHANGHAI: China stocks rose on Thursday after three straight sessions of losses, as subdued factory output data eased fears of policy tightening in the world’s second-largest economy, while tech firms shined on report of chip push.

The blue-chip CSI300 index rose 0.4% to 5,101.89, while the Shanghai Composite Index added 0.2% to 3,525.60.

The start-up board ChiNext climbed 2%, while Shanghai’s tech-focused STAR50 index rallied 4.8%.

The gains came after a three-day losing streak, with the CSI300 falling the most in two months on Wednesday.

Growth in China’s factory output slowed for a third straight month in May, likely weighed down by disruptions caused by COVID-19 outbreaks in the country’s southern export powerhouse of Guangdong.

The U.S. Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases.

Tech firms, in particular semiconductor firms, shined after report of Beijing’s latest chip push.

The CSI all share semiconductors & semiconductor equipment index jumps 8.6%, with top chipmaker Semiconductor International Manufacturing Corp ending up 7.5% in Shanghai.

Vice Premier Liu He, China’s economic czar, has been tapped to spearhead the development of so-called third-generation chip production and lead the formulation of policy support for the technology, Bloomberg News reported.

Though concerns over domestic valuations remained a focal point for investors.

“The root cause for the recent correction was high valuations, as many Chinese institutional investors switched out of expensive stocks to prepare for a year-end ranking,” said Dong Baozhen, chairman of Beijing-based private securities fund Lingtong Shengtai Investment Management.

“There is co-existence of extremely high valuations and extremely low valuations in the A-share market, which needs to be corrected,” he said. – Reuters



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