China Stocks Extend Gains on US-China Talks, Tech Optimism

The Shanghai Composite rose 0.4% to 3,963.8 on Tuesday, while the Shenzhen Component advanced 1.2% to 13,889, extending gains from the previous session as optimism over high-level US-China talks boosted sentiment. Chinese and US officials concluded a second day of talks covering AI, investment, and trade issues ahead of the Trump-Xi summit in the US. The closely watched meeting, scheduled for September 23–25, is expected to focus on AI, the Iran conflict, export controls, and rare-earth supplies. Investors are also monitoring whether Beijing and Washington can extend their trade truce before it expires in November. Further supporting the market was a rally in Asian tech sector, which tracked gains on Wall Street amid optimism surrounding Meta Platforms' latest AI agent. Among the standout performers were SMIC (1.7%), Hygon Information Technology (7.5%), Zhongji Innolight (1.6%), and Victory Giant Technology (9.2%).

The Shangai Composite Index gained 39 points or 0.99 percent on Monday to close at 3951 points. Gains were led by Greenland Holdings (10.34%), Poly Real Estate (6.95%) and Jiangsu Hengrui (4.78%). Biggest losers were Haier Smart Home (-3.92%), Aluminum Corporation of China (-1.71%) and Zhejiang Zheneng (-1.18%).

The Shanghai Composite rose 0.97% to close at 3,949.9 on Monday, while the Shenzhen Component gained 0.65% to 13,730, as the People’s Bank of China kept its benchmark lending rates unchanged for a 16th consecutive month at record lows. The one-year loan prime rate (LPR) was maintained at 3.0%, while the five-year LPR was held at 3.5%. The decision underscored policymakers’ caution over the economic fallout from the conflict in the Middle East, although exports continued to benefit from robust AI-related demand. Still, slowing growth, subdued inflation and weak credit demand continue to provide scope for a rate cut before year-end. Meanwhile, attention remained focused on high-level US-China engagement after officials led by Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met on Sunday to set the stage for a closely watched Trump-Xi summit from September 23 to 25. Most stocks traded in positive territory, led by the financial, energy and tech sectors.