China stocks rise on upbeat factory data, AI-related export demand

China's mainland shares rose on Tuesday, led by AI and semiconductor stocks, after stronger-than-expected factory activity pointed to resilient demand for high-tech exports, though Hong Kong stocks lagged.

** China's blue-chip CSI300 Index SZSE:399300 climbed 1.1% by the lunch break, while the Shanghai Composite Index SSE:000001 gained 0.2%. Hong Kong benchmark Hang Seng HSI:HSI was down 1.2%.

** The 5G Communication Index SSE:931079 was up 5.4%, while onshore semiconductor shares rose 2.6%. The tech-focused STAR50 Index SSE:000688 gained 3.5%.

** China's factory activity returned to expansion in June, driven by demand for chips, computers and other AI-related products, as robust export orders and front-loading to the United States to get ahead of tariffs offset weakness elsewhere in the economy.

** The data eased near-term growth concerns but kept expectations for further policy support intact, UBS analysts said in a note, as recent activity indicators continued to point to an uneven consumer recovery. The investment bank suggests investors watch signals from the July Politburo meeting.

** Shares of Chinese memory chipmaker GigaDevice Semiconductor SSE:603986 fell as much as 7% in early trade, while its Hong Kong-listed shares SSE:603986 slumped 7.3%, after the company warned of the risk of further tightening in wafer capacity supply from upstream foundry partners.

** Tech majors listed in Hong Kong HSI:HSTECH were up 1.4%.

** China's stock market has split sharply this year, with AI supply-chain shares rallying to record highs while traditional sectors have been weighed down by weak domestic demand.

** Onshore financial shares SZSE:399914 dropped 1.8%, while consumer staple stocks slipped nearly 2%.