SHANGHAI: China stocks closed slightly down on Friday, but ended the week near their highest level in 10 months, as upbeat economic data lifted sentiment and investors largely looked past US tariff concerns. Hong Kong shares declined on the day. China’s blue-chip CSI300 Index ended 0.2% lower, while the Shanghai Composite Index was down 0.1%. Hong Kong benchmark Hang Seng slipped 0.9%.
The Shanghai Composite Index rose to 3,645 points in morning trades, its highest level since October 2024.
China stocks have steadily climbed this week, supported by upbeat trade and service activity data. For the week, the CSI300 Index gained 1.2%, while the Hang Seng Index rose 1.4%.
“The market may be underpricing the risk of near-term deterioration in the US-China relationship,” said Morgan Stanley strategists led by Laura Wang.
The strategists urged investors to monitor developments in trade tensions and flagged the upcoming NPC Standing Committee meeting and second-quarter earnings season as potential catalysts for market direction. In the interim, they prefer mainland-listed A-shares over Hong Kong-listed H-shares, citing stronger relative performance during periods of global market volatility.
US President Donald Trump said on Wednesday that he could announce further tariffs on China over its purchases of Russian oil, depending on the developments in the trade discussions.
China faces an August 12 deadline to reach a durable tariff agreement with Trump’s administration.
Tech majors traded in Hong Kong were down 1.6%, while materials shares were up 2.5%. Shares of semiconductors dropped nearly 2%, weighed by an 8% fall in China’s largest chipmaker SMIC after it reported weaker-than-expected second-quarter earnings.
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