Shanghai stock benchmark reclaims 4,000 level on domestic chip optimism

By Jiaxing Li

Shanghai's benchmark stock index reclaimed the psychologically important 4,000 level on Thursday, as optimism over tech self-sufficiency boosted semiconductor and artificial intelligence-related shares.

** The Shanghai Composite index 000001 closed up 1% at 4,007.76 points. The blue-chip CSI300 index 3399300 was up 1.4%.

** Tech sectors led the gains. The CSI Semiconductor Industry Index (.CSI931865) rallied 4.6% in its biggest single-day gain in nearly two weeks. China's top chip maker SMIC 981 jumped 4.2% and Cambricon Technologies 688256 surged 9.8%.

** The CSI AI sector index 9930713 jumped 3% and the info tech sector 0000915 gained 2.8%.

** The Chinese government has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made AI chips, Reuters reported.

** This could be one of China's most aggressive steps yet to eliminate foreign technology from its critical infrastructure and achieve its quest for AI chip self-sufficiency.

** "China's tech self-reliance will be an irreversible theme going forward," said analysts at Zhongtai Securities. "We think the recent pullbacks in the domestic supply chain will be buying opportunities.

** In Hong Kong, the benchmark Hang Seng Index HSI was up 2.1% at 26,485.90. The Hang Seng Tech Index HHSTECH jumped 2.7%.

** Cathay Pacific Airways 293 touched a three-month high after it said it was buying back the remaining stake from Qatar Airways.

** Pony AI (2026.HK) and WeRide (0800.HK) slid as the Chinese autonomous-driving developers started trading in Hong Kong.

** Investors are also awaiting China's October trade data, due on Friday. Forecasts compiled by Reuters show that exports denominated in U.S. dollars (CNEXP=ECI) likely slowed to a year-on-year growth rate of 3.0%.