China’s blue-chip CSI300 Index gained 0.6%, while the Shanghai Composite Index edged down 0.2%.

Hong Kong’s benchmark Hang Seng Index was up 0.1%.

Wall Street extended its rally yesterday as a spate of economic data appeared to support the case for a December interest rate cut by the US Federal Reserve.

Sentiment was also aided by Alibaba’s forecast-beating quarterly revenue, and the e-commerce giant’s vow to invest in AI infrastructure “aggressively”.

UBS Asset Management said Chinese equities remain attractively valued, and with continued macro upside.

“We are far from overheated – the next stage for Chinese equities will be driven by fundamentals,” said Bin Shi, head of China Equities at UBS AM.

“All the market performance so far has been achieved without a very strong economy – if the economy cooperates, there’s more upside ahead,” Bin Shi said.

“We see China is turning a new page – growth underpinned by new drivers like AI,” said Jade Fu, portfolio manager at UBS AM.

The CSI Artificial Intelligence Index surged 3.7%, the CSI Cloud computing Big data Index leapt 3.2% and the STAR Chip Index jumped 2.2%.

In Hong Kong, Tech majors rose as much as 1%.

“We continue to highlight the structural improvements in the Chinese equity market landscape to global investors with strong conviction that they will continue,” Morgan Stanley equity strategist Laura Wang said in a note.

“Improvements in China include better corporate governance, friendlier business environment for the private sector, reduced Sino-US tensions and high confidence in Beijing’s determination to cushion against a significant economic downturn,” Wang said.