Shanghai Shenzhen CSI 300 and Shanghai Composite indexes added 1.3% and 1%, respectively, Hang Seng index rallied 2.2%, Nikkei 225 and TOPIX indexes gained 0.7% and 0.3%, respectively, KOSPI added 1%, and ASX 200 gained 0.2%

 Most Asian stocks rose on Monday, tracking gains in Wall Street after dovish signals from the U.S. Federal Reserve ramped up bets that interest rate cuts were coming in the next month.

Chinese and Hong Kong stocks were the best performers in the region, as they benefited from a rally in local technology and AI stocks.

Shanghai Shenzhen CSI 300 and Shanghai Composite indexes added 1.3% and 1%, respectively, while Hang Seng index rallied 2.2%.

The CSI300 reached its highest level since mid-2022, while the Shanghai Composite was near a 10-year high.

HSBC hiked its year-end targets for Chinese stock indexes, with analysts seeing a sustained rally in local markets on strong domestic liquidity. The AI infrastructure trade and biotech dominance is also expected to boost Chinese markets.

The Hang Seng was near a four-year high, buoyed chiefly by gains in tech and chipmaking stocks.

Chipmakers rallied amid increasing encouragement by Beijing that Chinese developers, especially in AI, use locally produced chips.

Chinese chip stocks have been on rise since last week after major AI developer DeepSeek released an updated model which it billed as more adapted for domestically made chips.

Semiconductor Manufacturing International Corp, China’s biggest chipmaker, surged more than 6% in HK trade, while Hua Hong Semiconductor Ltd soared to an over four-year high before sharply curbing gains.

Cambricon Technologies Corp Ltd, a major Chinese developer of AI chips, surged 8.3% to a record high in Shanghai trade.

Broader Asian markets also gained amid growing conviction that the Fed will cut interest rates in September. Lower rates benefit risk-heavy Asian markets by inviting more foreign capital flows into assets with higher yields.

Nikkei 225 and TOPIX indexes gained 0.7% and 0.3%, respectively.

KOSPI added 1% on gains in tech and chips, while Straits Times index was mildly positive. Australia’s ASX 200 also lagged, gaining only 0.2%, but stayed close to recent record highs.