HONG KONG: Chinese stocks weakened in choppy trading on Friday, as some investors took profit while awaiting planned talks between Chinese President Xi Jinping and his US counterpart Donald Trump.
The Shanghai Composite index lost 0.3 percent to 3,820.09 points at market close, pulling back from a 10-year high. The benchmark index declined 1.3 percent this week, its worst performance since early April.
China’s blue-chip CSI300 index rose 0.1 percent, ending the week 0.4 percent lower.
The banking sector index and insurance sector led the losses for the week, down 4.2 percent and 4.4 percent respectively.
The semiconductor index registered a 6.5 percent weekly gain as fresh optimism over China’s artificial intelligence developments continued to lift the sector.
Local chipmaker SMIC and peer Hua Hong rose 12 percent and 11 percent respectively for the week, as Huawei outlined chip and computing power plans, while China redirected its regulatory focus to Nvidia as leverage in the US trade talks. Sentiment was cautious ahead of the scheduled high-level call between Xi and Trump later in the day, with discussions expected to cover the TikTok deal and tariffs.
“There is objectively some profit-taking pressure after the market’s rapid short-term gains,” analysts at Changjiang Securities said.
Still, the view that China’s market is poised for a “slow bull” run remains intact, with more long-term capital and household savings entering the market, they added.
“We continue to expect stronger fund inflows into Chinese equities in the second half of the year, in line with our recent US marketing trip, which saw the highest level of investor interest in China since 2021,” Morgan Stanley said.
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