China Stocks Surge on Construction and Defence Gains Amid Gold Price Rebound

China's stock market experienced a significant upswing on Tuesday, propelled by strong performances in construction machinery and defence shares. The turnaround in gold prices contributed positively to the trading climate, particularly benefiting non-ferrous metal shares.

The blue-chip CSI300 Index climbed by 1.2%, and the Shanghai Composite Index rose by 1.3%. In Hong Kong, the Hang Seng Index saw a modest 0.2% increase. Construction machinery stocks rose by 6.1%, and defence shares increased by 4.6%. The non-ferrous metal sector closed up 3.1%, bolstered by a more than 5% jump in spot gold, marking its largest daily rise since November 2008.

Market analysts from UBS noted a shift in market dynamics, from liquidity-driven trends to a focus on earnings and leading companies. Despite these gains, the Hang Seng Tech Index dropped by 3% due to concerns over tax adjustments in the telecom sector. Tencent's stocks plummeted by 6% before a partial recovery. Meanwhile, Cambricon Technologies faced a 9% fall amid controversy, and Eastroc Beverage's trading debut was flat following a major share sale.