China Stocks Reach Decade Highs Amid Bullish Market Sentiment

China's stock market reached its highest levels in over a decade on Tuesday, driven by gains in non-ferrous metals and financials. Optimism ahead of the Lunar New Year and strong performances in tech and solar sectors contributed to this surge, showing confidence amongst investors.

China's stock market soared to its highest point in over a decade on Tuesday, with investor confidence bolstered by gains in non-ferrous metals and financials. As the Lunar New Year holiday approaches, both the CSI300 Index and the Shanghai Composite Index saw significant growth, closing 1.5% higher each, while Hong Kong's Hang Seng rose by 1.4%.

Driving the onshore and offshore gains were sectors like non-ferrous metals, which rose by 4.1% and 4.6% respectively, spurred by record-high copper prices. Insurers and securities also posted strong performances, with New China Life Insurance rising 6.5% thanks to projected sales boosts in the New Year. UBS analysts see limited downside risks, anticipating active investor participation until the 2026 Spring Festival.

Since mid-December, the Shanghai Composite Index has climbed more than 6%, with tech and internet stocks leading the way. UBS continues to prioritize these sectors, forecasting further growth fueled by advances in AI and global energy storage expansion. Meanwhile, tech giants in Hong Kong, including Baidu, extended their gains, marking a positive continuation for the third session in a row.

(With inputs from agencies.)