Mainland China stocks surge on Oracle AI developments

Asian stock markets largely performed well on September 11, 2025, with notable gains in Mainland China, particularly in the growth and technology sectors. This upward trend was characteristically led by substantial performances in tech hardware, semiconductors, and non-ferrous metals, alongside electric components, which collectively fueled market momentum and liquidity. By the end of the trading day, the Chinese Yuan (CNY) maintained its strength against the US dollar, closing at 7.1218, while also recording a healthy net inflow of $2.437 billion from Mainland investors into Hong Kong stocks via the Southbound Stock Connect initiative. Several major companies exhibited remarkable gains: Victory Giant Technology surged by 16.28%, followed by Zhongji Innolight at 14.28%, Eoptolink Technology at 13.42%, and Cambricon Technology at 8.96%. In contrast, the Hong Kong market did not show the same level of enthusiasm, despite the advance of more stocks than those that declined. Intrigued by the strong trend towards technology stocks, analysts noted Alibaba's convertible bond issue which received a positive review from the Financial Times. The issuance was supported by the proceeds being used for stock buybacks, a strategic move to mitigate dilution for its investors. Moreover, ongoing rumors related to US tariffs imposed on Chinese drugs negatively impacted the healthcare sector in Hong Kong. This scenario triggered a wave of volatility as stocks tied to Chinese pharmaceuticals faced unexpected selling pressure. In related news, the Ministry of Finance in China announced the expiration of tax-free purchases for electric vehicles at the year's end, which could impose a 5% sales tax compared to the traditional vehicles' 10%. This decision seems to align with the country's anti-involution campaign, marking a governmental response to curb excessive production levels in the electric vehicle market, exemplified by Nio’s recent actions to raise capital via stock sales. Additionally, urban revitalization plans were announced by the State Council for Beijing and nine other cities, setting a positive tone for monetary momentum in the region. As these factors come into play, the importance of market responsiveness to government policies and external pressures will be closely monitored in the upcoming weeks. The market's agility amidst such developments will serve as a critical indicator of China's economic health in both the short and long term.