AI Surge Boosts Chinese Stock Market to Decade Highs

Chinese stocks surged to a decade-high, with the Shanghai Composite Index rising above 3,800 due to optimism over domestic artificial intelligence. The tech-driven rally saw significant gains in indices and stocks, signaling a potential bull market as investors shift funds amid easing U.S.-China tensions and Beijing's industrial policies.

In a remarkable upswing, Chinese stocks reached decade-high levels on Friday, as the Shanghai Composite Index ascended past the 3,800 benchmark, fueled by renewed optimism surrounding domestic artificial intelligence advancements. The index closed up 1.5% at 3,825.76, marking its highest point since August 2015, and achieving the best weekly performance since November 2024 with a 3.5% gain.

The blue-chip CSI300 Index similarly made a significant leap, gaining 2.1% to hit a new 10-month high and ending the week with a 4.2% increase. Meanwhile, the tech-centric Star50 index saw a dramatic rise of 8.6%. Portfolio manager Cheng Yu of Allianz Global Investors noted a marked shift from bonds to stocks among investors, suggesting the early stages of a bull market.

The rally was notably led by domestic AI-related shares, with the CSI Semiconductor Industry Index soaring 9.5%, and the CSI Artificial Intelligence Index climbing 6.6%. Companies like Cambricon Technology and Hygon Information Technology hit daily limits with 20% gains, propelled by reports from Reuters concerning Nvidia and Foxconn's dealings. The optimistic tech environment is further bolstered by DeepSeek's enhanced V3 AI model, aligning with Beijing's strategic move for chip independence. Shanghai's market buoyancy reflects a 23% rise from its April low, marked by robust trading activities exceeding two trillion yuan over the past eight days.

(With inputs from agencies.)