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Mainland China markets follow US in embracing tech stock dominance

AI boom sees long-time bellwether Kweichow Moutai cede top spot in CSI 300 Index weightings to Zhongjin Innolight

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Contemporary Amperex Technology Ltd ranks second in CSI 300 Index weighting. Photo: Shutterstock
Zhang Shidongin Shanghai

Mainland China’s stock markets are converging with those in the US when it comes to the concentration of technology companies, with the sector becoming the biggest constituent of key equity benchmarks.

Technology stocks now represent 27 per cent of the weighting in the CSI 300 Index – which tracks the Shanghai and Shenzhen markets – twice as much as a year ago. That has put the tech sector on top of the benchmark’s 10 industry groups, with financials and industrials ranked second and third respectively.

The pattern also extends to individual stocks.

Zhongji Innolight and Eoptolink Technology, which make the optical modules used in AI data centres, and lithium-battery manufacturer Contemporary Amperex Technology Ltd (CATL) carry the biggest weightings on the CSI 300, eclipsing liquor giant Kweichow Moutai, which had been its main bellwether for years.

The weightings of CSI 300 companies are based on the valuations of free-float stocks, rather than the total number of shares.

In the United States, investor interest in artificial intelligence means the “Magnificent Seven” technology stocks – Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta and Tesla – account for about 40 per cent of total market capitalisation.

AI trades have dominated global equity markets over the past month after strong results from hyperscalers – massive cloud service providers – heightened expectations about data centre buildouts and the de-escalation of tensions in the Middle East boosted risk appetite.

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