SHANGHAI: Hong Kong stocks slipped on Friday but ended the week near their highest level in three years, as investors’ enthusiasm towards artificial intelligence continued to fuel the market. China stocks fell on disappointing trade data.
Hong Kong’s benchmark Hang Seng dropped 0.6%, after hitting its highest since February 2022. China’s blue-chip CSI300 Index and the Shanghai Composite Index both shed around 0.3%.
Tech majors in Hong Kong fell 0.5%, after touching the highest since late 2021.
For the week, the Hang Seng Index gained 5.6%, while the CSI300 Index added 1.4%.
The Hang Seng Tech Index and the onshore AI shares have risen 28% and 17%, respectively, since February when AI startup DeepSeek became the rage among market participants.
“China’s stock market is on the rise, driven by new narratives in fundamentals and artificial intelligence, attracting more foreign investors,” Lei Meng, China strategist at UBS, said in a media briefing.
“We observe that various types of investors, both active and passive, are gradually increasing their allocations to Chinese equities from underweight positions.”
Trade tensions may cause short-term market fluctuations, such as one-day reaction, but they are unlikely to have a significant long-term impact on the onshore stock market, Meng noted.
Meanwhile, China’s imports unexpectedly shrank over the January-February period, while exports lost momentum, as escalating tariff pressures from the United States cast a shadow over recovery in the world’s second-largest economy.
China warned it will “resolutely counter” pressure from the US on the fentanyl issue, after Washington levied an additional 10% tariffs on Chinese imports this week.
Onshore property shares dropped 1.8%,while materials and metals rose 1.0% and 1.3%, respectively.
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