FX.co ★ China Stocks End at Multi-Month Highs

The Shanghai Composite Index increased by 0.4%, closing at 3,517, while the Shenzhen Component Index advanced by 1.4% to reach 10,874 on Friday. This upward movement saw mainland stocks achieving multi-month peaks, spurred by supportive measures for the automobile industry and rejuvenated interest in stocks related to artificial intelligence. Shares linked to AI appreciated by 1.8%, and the information technology sector surged by 2.2% to its highest level in four months, buoyed by the announcement that Nvidia plans to enhance the supply of its H20 chips to China. Additionally, shares in the automotive sector rose by 1.7% following pledges by officials to address aggressive competition and price wars in the electric vehicle market. Concurrently, analysts at Citi upgraded their outlook on Chinese equities to an overweight rating, citing improved earnings forecasts, reasonable valuations, and key growth themes such as advancements in AI and enhancements in corporate governance. In trade-related developments, U.S. President Trump has moderated his approach towards China in a bid to arrange a summit with Xi Jinping and reach a trade agreement, pivoting from harsh rhetoric to focusing on swift purchase agreements amid lingering trade challenges.