Tech outperforms traditional sectors as China’s uneven recovery set to fuel AI stock revival

The Star Market 50 index of mostly chipmakers rebounded 9 per cent in August, recouping some of the 26 per cent slump in the previous month

China’s K-shaped economic recovery is likely to keep investors betting on artificial-intelligence stocks, as the latest data indicates the tech sector remains a key driver for growth while consumption and property continue to act as drags, according to analysts.

Consumption and the housing market still accounted for roughly 70 per cent of the world’s second-largest economy, according to Barclays.

“There’s a big chance that technology stocks will revisit their highs of June and there’s more room for the rebound to run,” said Zheng Xiaoxia, an analyst at Hua An Securities. “The resilience of the tech industry will be confirmed in the interim reports coming in late August.”