The benchmark Hang Seng Index rebounded from its flat opening to end 368 points, or 1.45 percent, up at 25,834 after three consecutive days of declines as traders await results from heavyweights Tencent and Alibaba in a busy week for earnings.
The China enterprises index was up 144 points, or 1.67 percent, at 8,816 while the tech index jumped 133 points, or 2.69 percent, to 5,111 after recent heavy sell-offs.
Up north, the benchmark Shanghai Composite Index ended down 10 points, or 0.26 percent, at 4,084.
The Shenzhen Component Index was 26 points, or 0.19 percent, higher at 14,307 while the ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, was 46 points, or 1.41 percent, up at 3,357.
Sentiment was aided by a surge in chipmaking stocks, triggered by a report that China’s Hua Hong Group had developed advanced chip-making tech that can be used to produce AI chips.
But uncertainty lingers as there’s no sign of a quick end to the Middle East conflict that has roiled global markets and sent oil prices soaring.
On Sunday, US officials predicted that US-Israeli attacks on Iran would end within weeks, but Iran said it remained “stable and strong” and ready to defend itself.
“Cost-push inflation in an environment of weak demand does China little good,” Gavekal Dragonomics’ analysts Thomas Gatley and Wei He wrote.
Higher energy prices “will put downward pressure on real growth”.
The Iran situation also complicates outcomes of the upcoming Xi-Trump summit this month.
“Recent developments, especially in the Middle East, have added complexity to the outlook for the meeting,” Morgan Stanley said in a note to clients.
If the summit is cancelled or postponed, “we believe this would heighten market concerns over rising inflation and a further growth slowdown globally”.
Gold-related stocks, metal and tech shares fell sharply as investors swarmed into defensive plays such as consumer and banking stocks.
In Tokyo, the Nikkei share average closed in the red for a third consecutive day, down 68 points, or 0.13 percent, at 53,751, after earlier falling up to 1.3 percent.
The broader Topix slid 0.5 percent to 3,610.
In Seoul, the Kospi added 62 points, or 1.14 percent, to end at 5,549. (Reuters/Xinhua)
Edited by Tony Sabine
