China's A-share market saw broad gains today (December 12), with the Shanghai Composite Index rising 0.41%, the Shenzhen Component Index up 0.84%, and the ChiNext Index climbing 0.97%. Total trading volume across Shanghai and Shenzhen exchanges reached 2.09 trillion yuan, marking an increase of over 230 billion yuan from the previous session.
The AI sector staged a strong comeback, with the Sci-Tech AI ETF (589520), which focuses on domestic AI industry chains, and the ChiNext AI ETF (159363), which has over 56% exposure to optical modules and CPO technology, both surging more than 2% intraday. Multiple themes including commercial aerospace, controlled nuclear fusion, and superconductivity also contributed to the rally. The General Aviation ETF (159231), covering low-altitude economy, aircraft manufacturing, and commercial aerospace, closed 1.69% higher, while the popular National Defense ETF (512810) hit a fresh one-month high.
In Hong Kong, tech stocks staged a broad rally, with the A+H semiconductor sector gaining momentum. The Hong Kong Information Technology ETF (159131), the first ETF tracking Hong Kong-listed chip stocks, rose 2.07% on heavy volume, while the Hong Kong Internet ETF (513770), which holds major internet leaders, jumped 1.86%, reclaiming its 5-day and 10-day moving averages.
On the policy front, a key meeting on December 11 reviewed economic work for 2025 and outlined plans for 2026, emphasizing "qualitative improvement and quantitative growth" to achieve a strong start to the 15th Five-Year Plan. International institutions, including the World Bank and IMF, have also raised their growth forecasts for China's economy, citing long-term potential driven by technological innovation and resource allocation efficiency.
Looking ahead, Debon Securities noted that the Fed's rate cuts have boosted global liquidity, while Huatai Securities highlighted continued policy support for stable growth. The focus remains on tech innovation, dividends, and cyclical resources, with undervalued policy-sensitive sectors also in play.
**ETF Spotlight:** 1. **Sci-Tech AI ETF (589520)** surged 2.12% on heavy volume, with 28 of its 30 holdings closing higher. Key drivers include breakthroughs in edge AI applications, such as ByteDance's Doubao mobile assistant and Alibaba's Quark AI glasses. Policy tailwinds, including the "AI+" action plan targeting 70% adoption of next-gen smart devices by 2027, further bolster the sector. Analysts see 2026 as a pivotal year for edge AI, with the ETF well-positioned to capture growth across hardware and software segments.
2. **Hong Kong Information Technology ETF (159131)** gained 2.07%, fueled by optimism around OpenAI's GPT-5.2 release and bullish analyst calls on AI's long-term potential. The ETF's valuation (34.26x P/E) remains attractive compared to global tech indices, with a concentrated portfolio of 42 Hong Kong-listed tech firms, including SMIC (20.48% weight) and Xiaomi (9.53%).
3. **National Defense ETF (512810)** extended its three-week winning streak, hitting a one-month high as commercial aerospace and advanced materials stocks rallied. The sector benefits from dual-use technologies bridging military and civilian applications, with analysts forecasting a shift from cyclical to sustained growth driven by domestic demand, exports, and civilian spillovers.
*Risk Disclosure: ETFs mentioned track respective indices, and past performance does not guarantee future results. Investors should assess risks based on individual circumstances.*
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