China stocks hit 11-year high on AI optimism, exports rebound

HONG KONG- Chinese stocks hit a near 11-year high on Monday, supercharged by a strong tech rally driven by renewed AI optimism and export strength.

** At the midday break, the benchmark Shanghai Composite index .SSEC was up 0.9% at 4,219.13, after touching its highest level since July 1, 2015, in earlier trade.

** The blue-chip CSI 300 Index .CSI300 was up 1.4%, its highest in more than 4 years.

** In Hong Kong, the Hang Seng Index .HSI was down 0.3% at 26,318.37.

** Tech shares powered the markets higher, buoyed by a broader regional rally as optimism about AI grew.

** The CSI Semiconductor Index .CSI931865 surged 7.3% to a record. The CSI AI Index .CSI930713 climbed 3% and the info tech sector index .CSIINT surged 4.8%, also touching all-time highs.

** The tech-focused Star Index .STAR50 was up 5.3%, while ChiNext Index .CNT added 3%.

** China's export growth rebounded strongly in April as factories raced to meet a wave of orders from AI-related industries and other buyers seeking to stockpile components amid the Iran conflicts.

** Meanwhile, the country's producer price index (PPI) surpassed expectations in April to hit a 45-month high, while consumer inflation also accelerated as global energy costs remained elevated, data released on Monday showed.

** "Growing global AI computing demand will continue lifting semiconductor-related exports going forward," with China's manufacturing cost advantage becoming more pronounced, analysts at CITIC Securities wrote in a note.

** Elsewhere, investors are also watching the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, where Iran, Taiwan, and artificial intelligence are set to be discussed.

** Amid escalating tensions across the world, this summit could be a step where the two dominant powers manage their rivalry, maintain the uneasy calm, and avoid a total breakdown in relations through high-level personal diplomacy, analysts at Nomura said.

(Reporting by Jiaxing Li in Hong Kong; Editing by Rashmi Aich)