China tech stocks extend gains

Chinese equities ended mixed on Thursday, with the Shanghai Composite edging down 0.01% to 3,853 while the Shenzhen Component gained 0.67% to 13,446, marking its highest level since February 2022. The divergence reflected sectoral differences, as high-growth technology and new energy shares drove gains in Shenzhen, offsetting weakness in more traditional industries on the Shanghai exchange.

Investor sentiment was buoyed by China’s continued emphasis on artificial intelligence development. Alibaba announced plans to open its first overseas data centers in Brazil, France, and the Netherlands, a move aimed at accelerating the company’s global AI expansion strategy. The news fueled optimism across the broader technology sector, reinforcing expectations that Chinese firms will increasingly look abroad to drive growth amid lingering domestic headwinds.

Hopes of easing US-China trade tensions also added support, with markets encouraged by ongoing negotiations and a temporary pause in new tariff escalations. However, overall trading activity remained subdued as investors grew cautious ahead of the upcoming National Day holiday, typically a period of thinner volumes and reduced liquidity.

Technology and renewable energy stocks stood out as the session’s key outperformers. Strong gains were seen in Zhongji Innolight (+2.6%), Eoptolink Technology (+6%), Hygon Information Technology (+3.1%), Contemporary Amperex (+3.4%), and Sungrow Power (+3.7%), reflecting solid demand for optical communications, semiconductors, and clean energy plays. By contrast, financials and industrials were more muted, holding back broader benchmarks.

Overall, the rally in Shenzhen highlighted investor confidence in growth-oriented sectors aligned with China’s long-term policy priorities, while the marginal dip in Shanghai underscored persistent caution over macroeconomic challenges, particularly in property and heavy industry.