HONG KONG, Feb 18 (Reuters) - Chinese tech stocks

continued to rally on Tuesday on optimism that President Xi

Jinping's rare meeting with the country's tech entrepreneurs

foreshadowed a regulatory U-turn after years of a sector-wide

crackdown.

The Hang Seng Tech Index climbed 2.5% to close at

a fresh three-year high and bring the gains for the past month

to over 30%. The overall Hang Seng Index jumped 1.6% to

its highest since early October.

Index heavyweight Alibaba ( BABA ) surged 3.3% to a near

three-year high after state media CCTV showed Xi and Alibaba ( BABA )

founder Jack Ma shaking hands at the meeting on Monday.

Tencent ( TCTZF ) jumped 2% to its highest since 2021 and

Xiaomi ( XIACF ) rallied over 7% to a record high.

Their executives were among the high-profile Chinese tech

leaders at the symposium which was considered a signal that

private enterprise could be treated kindly and that a crackdown

on tech giants is over.

"We think the symposium marks an end to the crackdown,

potentially removing one of the longest-lasting overhangs on the

sector's performance," analysts at UBS Global Wealth Management

said in a note.

Xi's support for innovation industries, ongoing macro policy

support and other fundamental improvements will be crucial

drivers of the Chinese tech sector's outperformance against the

broader market from here, they said.

Wall Street banks such as Goldman Sachs, Citi and Bank of

America have changed their stance on China since the

DeepSeek-triggered tech rally, saying the bull case is getting

stronger for Chinese stocks due to the AI breakthrough and

Beijing's pro-business shift.

On the day, however, the onshore markets closed lower as

investors booked profit after early-session gains. The blue-chip

CSI300 and the Shanghai Composite indexes fell

0.9% each after hitting their 2025 highs earlier in the session.

The CSI AI index slipped 2.5% to lead the

losses onshore, with top chip designer Cambricon Technologies

tumbling 5%. The gauge is still up nearly 12% so far

this year.

U.S.-listed shares of Chinese firms mirrored gains in their

domestic peers.

Shares of Alibaba ( BABA ), online brokerage firm UP Fintech

Holding and online education firm Gaotu Techedu ( GOTU )

jumped between 3.2% and 5.5% in premarket trading.

The iShares MSCI China ETF and iShares China

Large-Cap ETF were up 1.5% each in premarket, while the

tech-focused KraneShares CSI China Internet ETF gained

1.6%.