Shanghai Composite index flirts with 3,700 level as bullish mood persists

China stocks edged up on Thursday to a fresh 3-1/2-year high as bullish sentiment continued to build on strong technology gains and renewed investor appetite.

** At the midday break, the Shanghai Composite index 000001 was up 0.2% at 3,690.88 after briefing topping the 3,700 level for the first time since December 2021. The blue-chip CSI300 index 3399300 was up 0.5%.

** Leading gains, Shanghai's tech-focused STAR50 index 0000688 was up 1.8%​, the semiconductor index (.CSI931865) jumped 2.5% and the insurance sector (.CSI399809) jumped 2.6%.

** "Risk appetite seems to be returning" with margin buying surpassing 2 trillion yuan last seen in the 2015 bull market, Citi analysts said.

** Delivery of incremental demands-side stimulus is well on track following the Politburo meeting in July, the bank said, as measures such as interest subsidy for consumption loans, mega dam project in Tibet and "anti-involution" campaign have all helped sentiment.

** External risks could be largely defused for now" with the U.S.-China tariff truce officially extended to mid-November.

** In Hong Kong, the benchmark Hang Seng Index HSI weakened 0.1% to 25,597.85. The tech index HHSTECH lost 0.5%.

** Market heavyweight Tencent 700 briefly touched HK$600 per share for the first time since 2021, after it reports a 15% revenue growth in last quarter on strong gaming performance.

** Asian fund managers' tone on China has turned more enthusiastic, with the growth outlook at a five-month high and households gradually increasing allocations to spending and investment, Bank of America said in a latest survey.

** China has recently climbed to the second spot in Asian among fund managers behind Japan, the bank said.