UPDATE 1-China stocks rise as AI optimism offsets bond concerns

** Semiconductor and electricity stocks led the gains in China A-shares as investors took advantage of a recent pullback to increase holdings of AI ‌related stocks. ** Julius Baer maintained its overweight rating on China, the Swiss private bank said in ‌a note on Tuesday.

China stocks ​and Hong Kong shares closed higher on Tuesday, ​led by semiconductor shares, as optimism over ‌artificial ​intelligence beneficiaries outweighed worries over a global bond sell-off. ** At the close, China's blue-chip CSI300 Index settled 0.4% higher, while the Shanghai Composite Index gained 0.9%, ‌both snapping a three-day losing streak.

** Hong Kong benchmark Hang Seng rose 0.5%. ** Semiconductor and electricity stocks led the gains in China A-shares as investors took advantage of a recent pullback to increase holdings of AI ‌related stocks.

** Julius Baer maintained its overweight rating on China, the Swiss private bank said in ‌a note on Tuesday. ** "The momentum in artificial intelligence infrastructure stocks will likely continue,"said Richard Tang, an equity analyst at the firm.

** However, sentiment was partially weighed down by recent surging bond yields which have put pressure on Asian equities. ** Geopolitical risks also continue ⁠to ​keep investors on edge. U.S. President ⁠Donald Trump said on Monday that he had paused a planned attack against Iran.

** China's rare earth stocks declined 1.5% after ⁠Australia orderedinvestors with a China background divest their holdings in a rare earths project. ** Meanwhile, investors are still assessing the ​outcomes of Trump's China visit last week.

** Eugene Hsiao, head of China equity strategy at Macquarie Capital, ⁠said investors "expected some hard agreement or tangible thing to come out," but that didn't happen. ** On the positive side, one thing ⁠people ​are arguably pricing in, is a degree of global stability, he added, as there were no negative surprises either.

** In Hong Kong, state-owned oil and gas major CNOOC and internet giant Tencent were the outperformers ⁠among index heavyweights, up 3% and 2.4% respectively. ** Standard Chartered Bank's Hong Kong shares advanced more than 2%, as ⁠the firm announced plans ⁠to achieve higher returns, including through cutting 7,000 roles by 2030.

** The smaller Shenzhen index ended 0.52% higher and the start-up board ChiNext Composite index was weaker ‌by 0.164%.