China stocks rebound after selloff; Hong Kong extends gains on Fed rate outlook

SHANGHAI: China stocks rebounded on Friday after a sharp selloff in chipmakers in the previous session, while Hong Kong shares extended gains as a tepid US jobs report reinforced bets that the Federal Reserve would keep monetary policy supportive. 

As of midday, the Shanghai Composite index inched up 0.6%, while the blue-chip CSI300 index gained 1.2%.

The tech-focused STAR 50 index, which suffered its biggest one-day decline since April 2025 on Thursday, advanced 1.1%. Robotics shares led gains, with a sector sub-index jumping 5.7% after China’s securities regulator approved Unitree’s Shanghai IPO late on Thursday.

In Hong Kong, the Hang Seng Index advanced 1.6%, while the city’s tech shares jumped 2%.

US job growth slowed sharply in June, signalling a cooling labour market and prompting investors to scale back expectations for higher US interest rates.

“We believe the incrementally bigger representation of the tech- and innovation-heavy sectors in the A-share market will continue, with clear policy, funding, resources and capital market action support,” analysts at Morgan Stanley said in a note.

“As a result, we see the best opportunities at the index level as offered by the A-share market.” Investors are closely watching June economic data due in the coming weeks for fresh clues on the strength of China’s economic recovery.

“Monthly indicators could show signs of stabilisation,” Citi analysts said in a note. “Investment remains a drag… This set of data is unlikely to shift the tone of the mid-year Politburo meeting.” ‑Reuters