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Investing.com -- China stocks reached an eight-month high on Tuesday, while Hong Kong shares climbed to a multi-year peak, as construction and power companies surged following the launch of a major dam project in Tibet.
The blue-chip CSI300 Index rose 0.8%, while the Shanghai Composite Index added 0.6%. The Hong Kong benchmark Hang Seng Index gained 0.5%, reaching 25,130 points, its highest level since November 2021. The CSI 300 Index touched its strongest point since November 2024.
Construction and power stocks extended their rallies after China announced over the weekend that construction had begun on a $170 billion hydropower dam in Tibet, described as the world’s largest. Shanghai-listed Anhui Conch Cement and Power Construction Co. of China both hit their daily maximum gain limit of 10%.
"Investors usually don’t care much about the real economy in such a bull market, especially with the rise of their confidence in Beijing’s capability in handling any economic cracks," said Ting Lu, chief China economist at Nomura.
Lu noted that easing U.S.-China tensions, Beijing’s push for long-term funds to invest in stocks, and renewed confidence in the country’s manufacturing sector have all contributed to improved market sentiment.
"However, if stock markets lose steam, investors might shift more attention to the real economy, which will likely face some challenges in the second half of this year," Lu added.
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