China, Hong Kong stocks end higher on US-Iran peace deal hopes

China and Hong Kong stocks closed higher on Thursday, led by AI and tech shares, as risk sentiment improved on hopes of a U.S.-Iran peace deal.

China's blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC gained 0.5% each. Hong Kong's benchmark Hang Seng .HSI was up 1.6%.

Market mood brightened after Iran said on Wednesday it was reviewing a U.S. peace proposal that sources said would formally end the war but leave unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

"Despite the lack of a definitive resolution, defensive positioning has lowered the threshold for positive surprises to influence price action," UBS strategist Rohit Arora said.

Onshore energy shares .CSIEN fell 4.3%, the Coal Index .CSI000820 dropped 4.8%.

The 5G Communication Index .CSI931079 led gains onshore, up 4.1%.

Hong Kong-listed tech majors .HSTECH were up 3.1%, following an overnight rally in their counterparts listed in New York. Alibaba shares 9988.HK jumped 5%.

China's tourism sector saw a rise in trips during the May Day holiday, though official data released the day after the five-day break did not include spending figures that usually provide a fuller picture of consumption over the period.

Chinese liquor shares .CSI399997 edged up 0.5%, while food and beverage stocks .CSI000807 were roughly flat.

Markets are watching closely for U.S.-China developments as U.S. President Donald Trump is set to meet Chinese President Xi Jinping this month on his first visit to China in eight years.

-Shanghai Newsroom/Reuters