Chinese mainland shares closed higher on Wednesday, driven by renewed investor enthusiasm for artificial intelligence and a private survey showing faster expansion in service sector activity, according to Timothy Pope, a market analyst for China Global Television Network (CGTN).
The benchmark Shanghai Composite Index rose 1.17 percent to 4,160.17 points, while the Shenzhen Component Index closed 2.33 percent higher at 15,459.62 points. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 2.75 percent to close at 3,778.16 points.
"The enthusiasm today was a mix of AI optimism and some relief over the latest economic data, which came in looking quite strong. Today we saw the release of service sector activity data. This showed that it expanded at a faster rate in April. And of course there seems no end to investors' appetite for anything AI-related. All of that pushed the Shanghai Composite Index up by almost 1.2 percent, the CSI 300 up 1.5 percent, slightly off the intra-day highs and the STAR50 index up by 5.5 percent. At one stage, the STAR50 had also been up by 8 percent, which is huge, and the ChiNext board added 2.8 percent, touching levels we haven't seen since 2015," said Pope.
"So today the markets here on the Chinese mainland just looked very, very healthy. These last two, the ChiNext and the STAR 50 -- these are the key ones to look today. They are home to a lot of companies in the AI space, quite a few stocks there were hitting their 20 percent daily limit gains today," he added.
The analysts also underscored gains in sectors outside the tech arena, indicating a broad base of investor confidence.
"It's not just AI hype behind investors shift into these stocks. They are looking at more signs as well. The fundamentals are there too, because we've got quite a few of their 2025 annual results through now and the direction is looking pretty strong, particularly compared with the rest of the market. For the STAR50, combined net profit for the companies which have so far reported has grown more than 30 percent year on year, and we're seeing strong performances for ChiNext companies too. So investors are all taking this as a bit of a sign that the Chinese economy is successfully starting to pivot to a higher-tech development model," he said.
Chinese stocks rally on AI optimism, service sector expansion: analyst
