HONG KONG: China and Hong Kong stocks edged higher in volatile trading on Wednesday, with mainland shares supported by AI stocks ahead of Nvidia’s earnings later in the day, while investors remained cautious amid steady lending rates.

The Shanghai Composite index closed up 0.66% at 3,367.99.

The blue-chip CSI300 index ended up 0.22%, with the consumer staples sector and the healthcare sub-index closing 0.37% and 2.13% higher, respectively.

The CSI300 Artificial Intelligence Index climbed 1.5% ahead of Nvidia’s report card later in the day.

Hong Kong’s benchmark Hang Seng Index gained 0.21% at 19,702.79.

China’s central bank left key lending rates unchanged at the monthly fixing on Wednesday, after recent rate cuts squeezed banks’ profitability and the yuan came under fresh pressure with Donald Trump’s imminent return to the White House.

Market fundamentals have improved following the recent policy measures but haven’t shown significant strength yet. The market rotation among major sectors is likely to stay with no clear signs of earnings bottoming out, analysts at Sinolink Securities said in a note.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.19%.

Chinese ADRs fell 0.75% overnight.

Elsewhere, major Chinese fund companies announced a reduction in fees for a batch of equity exchange-traded funds (ETFs), after China’s chief securities regulator Wu Qing pledged to encourage index investment and fund industry fee reform.