China stocks edge higher on Apple supplier rally, Xi-Trump call

By Jiaxing Li

HONG KONG, Sept 22 (Reuters) - Chinese stocks inched higher in choppy trading on Monday, led by a rally in Apple suppliers and chip shares, as investors digested positive signals from high-level U.S.-China talks.

The Shanghai Composite index .SSEC closed up 0.2% to 3,828.58 after swinging between gains and losses. The blue-chip CSI300 index .CSI300 climbed 0.5%.

U.S. President Donald Trump said he and Chinese President Xi Jinping made progress on a TikTok agreement and would meet face-to-face in six weeks in South Korea to discuss trade, illicit drugs and Russia's war in Ukraine.

"These developments suggest US-China headlines are likely to stay stable or improve over the next few months," Goldman Sachs said in a note.

Lifting markets higher on Monday, the electronics sector .CSI930652 rose 4.3% and the info tech sector .CSIINT gained 4.1% to a five-year high, as Apple AAPL.O suppliers rallied on news that OpenAI had signed a deal with Luxshare 002475.SZ to make a consumer device.

Luxshare 002475.SZ surged to the daily trading limit of 10%, while peer Goretek 002241.SZ and Foxconn 601138.SS jumped 7.7% and 6.6%, respectively.

*The chip sector .CSI931865 added 3.3% and the AI sector .CSI930713 jumped 2%, also lifting the market higher.

Financial stocks continued to weigh on the broader market. The banking sector .CSI399986 lost 1% after a 4.2% drop last week, while the insurance sector .CSI399809 was down 0.3%.

The recent weakness in financial sectors has poured some cold water on the stock rally, but the markets still holds potential for further upside with geopolitical risk abating and liquidity conditions improving on Fed rate cuts, analysts at Guotai Haitong said in a note.

In Hong Kong, the Hang Seng Index .HSI was down 0.8% at 26,344.14. The tech sector .HSTECH weakened 0.6%.

Elsewhere, China Securities Regulatory Commission Chairman Wu Qing said at a Monday press briefing that the regulator will continue to improve the quality of listed companies, attract more global capital into China, and strictly supervise the market.