Mainland stocks ended their first trading session of 2026 on a strong note, with the Shanghai benchmark topping the 4,000-level for the first time in nearly three months, as investors piled into tech sectors while looking past geopolitical tensions.

In Hong Kong, the benchmark Hang Seng Index inched up eight points, or 0.03 percent, to 26,347, while the tech index was up five points, or 0.09 percent, at 5,741 and the China Enterprises Index was down 20 points, or 0.22 percent, at 9,148.

The benchmark Shanghai Composite Index ended the day up 54 points, or 1.38 percent, at 4,023 while the Shenzhen Component Index was 303 points, or 2.24 percent, higher at 13,828 and the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was 91 points, or 2.85 percent, at 3,294.

The best single-day gain in nearly four months pushed the Shanghai benchmark above the 4,000-level for the first time since November 14.

The ⁠blue-chip CSI300 index was up 1.9 percent, its best gain since September.

The tech ‍sector rallied the broader market higher.

Shanghai's tech-focused Star50 index was up 4.4 percent.

CSI Semiconductor surged 5.6 percent to a three-month high, and artificial intelligence index added 3.2 percent.

"Innovation-led growth, particularly in AI and advanced manufacturing, could emerge as ‌new growth engines" despite structural challenges such as property slump and weak income trends, Bank of America ‍analysts said in a note.

They ‌see a 10 percent to 15 percent room ‌for ‌further multiple expansion for China equities.

Among other winners, the insurance sector surged 5.5 percent to a record, and the defence sector climbed 2.1 percent to the highest level ⁠in nearly three years.

Meanwhile, the energy sector weakened 1.2 percent as major state firms with investments in Venezuela dropped after the United States captured President Nicolas Maduro and said it would take control of the South American ‌country.

"We believe overseas geopolitical disruptions are likely to ‍be temporary emotional shocks that won't derail the upward trend of the spring rally, given ample market liquidity and positive policy signals," analysts at Huatai Securities said in a note. (Reuters/Xinhua)