China stocks climb as AI and chip shares rebound

Fidelity China Special Situations

Chinese stocks rose on Tuesday as artificial intelligence, semiconductor and communications shares recovered from a recent sell-off.

The Shanghai Composite Index gained 0.2% by midday, while the CSI 300 Index rose 0.9 per cent. Technology-focused indices performed more strongly. The ChiNext Price Index climbed 4.8% and the STAR 50 Index added 2.9%.

Artificial intelligence shares led the advance. The CSI Artificial Intelligence Index rose 4.6 per cent, the CSI Semiconductor Index gained 3.2% and the CSI 5G Communication Index increased by more than 7%.

The stronger performance in technology stocks showed that the rebound was concentrated rather than broad. This keeps attention on sector selection, valuation and the timing of exposure after recent volatility.

DeepSeek supported sentiment after one version of its flagship artificial intelligence model was identified in benchmark testing as the least expensive to operate among several major global models. Lower operating costs could support wider commercial use of artificial intelligence and strengthen the position of Chinese developers.

Alibaba also helped lift the sector after launching what it described as its largest and most capable artificial intelligence model so far. Its Hong Kong-listed shares rose 1.4 per cent and reached their highest level in two months. The launch strengthens Alibaba’s position in artificial intelligence and cloud computing. These businesses remain important to the group’s future growth and its ability to compete with other large technology companies.

Healthcare stocks also advanced. The sector gained 2.7%, while Wuxi AppTec reached the daily 10% trading limit after reporting earnings above expectations.

Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.

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