China Stocks Rise on Coal and Chips; Brokerages Gain After Crackdown

China Stocks Rise as Coal and Chip Sectors Lead Gains

Mainland Chinese equities advanced on Monday, driven by a rally in coal shares following the country's deadliest mine accident in 17 years, which sparked expectations of tighter supply. Additionally, semiconductor stocks surged after Huawei unveiled ambitious chip-making plans, and brokerages gained on the back of a regulatory crackdown on illegal cross-border flows.

Coal Sector Surges After Mine Tragedy

The coal industry sub-index jumped 4.8% after a major mine disaster late Friday raised fears of stricter safety inspections and reduced coal output. Investors bet that supply constraints would support coal prices and related equities.

Brokerages Edge Up on Regulatory Enforcement

China's announcement of a major clampdown on illegal cross-border investment lifted brokerage shares. The CSI all-share investment banking and brokerage index rose 0.5%, with major firms like China Merchants and CITIC Securities posting modest gains. Analysts at SWS Research noted that the impact on Hong Kong stocks and Chinese ADRs is limited and largely psychological, with the underlying liquidity trend remaining robust.

Semiconductor Sector Boosted by Huawei's Ambitions

A sub-index tracking the semiconductor industry jumped 2.5% after Huawei Technologies said it expects to design high-end chips by 2031 with transistor density equivalent to a 1.4-nanometer process. This reinforced optimism about China's chip self-sufficiency drive.

Broader Market Sentiment Supported by Hormuz Hopes

The benchmark Shanghai Composite inched up 0.4%, and the blue-chip CSI300 rose 0.5%. Hong Kong markets were closed for a public holiday. Market sentiment also got a lift from hopes of a deal to reopen the Strait of Hormuz, though the Trump administration played down the chances of a near-term agreement. BNY macro strategist Wee Khoon Chong pointed to strengthened growth momentum and property market recovery boosting confidence in Hong Kong capital markets, evidenced by a surge in IPO activity.