Key Facts
- Shanghai Composite
- up 0.3% at 3,822.28
- CSI 300
- rose 1.3%
- CSI AI Index
- rose 5.9%
- CSI 5G Index
- surged more than 8%
- Hang Seng
- weakened 0.6%
- Manufacturing expansion
- slowest pace in four months in July
Background
Chinese equities have experienced sharp corrections in AI-linked sectors recently, following a period of strong gains. The recent decline has been viewed by some analysts as a potential buying opportunity.
Research firm Artificial Analysis said a version of Chinese startup DeepSeek's flagship AI model is by far the least expensive to run on benchmark tests among well-known models globally, as the company seeks to regain momentum after being surpassed by rivals.
Current Situation
At market close on Monday, the Shanghai Composite index was up 0.3% at 3,822.28 points, while the blue-chip CSI 300 index rose 1.3%. The technology sector led gains, with the ChiNext Price Index climbing 5.7% and the STAR 50 Index up 4.1%.
China's CSI Artificial Intelligence Index rose 5.9%, the CSI Semiconductor Index climbed 4.9%, and the CSI 5G Communication Index surged more than 8%, climbing from recent lows. The healthcare sector gained 2.6%, with WuXi AppTec surging by the 10% daily limit after beating earnings estimates.
In Hong Kong, the Hang Seng Index weakened 0.6%, while the Hang Seng Tech Index added 0.2%. Shares of Alibaba gained 0.5% after the company unveiled its largest and most capable AI model to date.
| Index | Change |
|---|---|
| Shanghai Composite | +0.3% |
| CSI 300 | +1.3% |
| ChiNext Price Index | +5.7% |
| STAR 50 Index | +4.1% |
| CSI Artificial Intelligence Index | +5.9% |
| CSI Semiconductor Index | +4.9% |
| CSI 5G Communication Index | >+8% |
| Hang Seng Index | -0.6% |
| Hang Seng Tech Index | +0.2% |
Impacts
The rebound in AI and chip shares could boost investor sentiment in China's technology sector, potentially attracting capital back into these stocks. The strong performance of the 5G index suggests renewed interest in communication technology.
The slower manufacturing expansion in July, with output and new orders rising more slowly, may weigh on broader economic growth expectations. However, export orders returning to growth could provide some support.
Asian markets made cautious gains following a global rally, with oil prices near the lowest levels in weeks amid a US-Iran conflict stalemate, which may influence regional market dynamics.
Future Outlook
Scenario analysis: The possibilities below are not certain predictions.
If AI and chip shares continue their rebound, they could reassert market leadership into August, as JP Morgan analysts expect. The recent decline may create a more attractive entry point for investors.
However, if manufacturing slowdown persists, it could dampen overall market gains. The sustainability of the AI rally may depend on further earnings beats and global tech sentiment.
The US-Iran conflict stalemate and oil price levels could affect market stability. If geopolitical tensions escalate, they may disrupt the current cautious optimism in Asian markets.
Source: freemalaysiatoday.com
