SHANGHAI: China stocks bounced on Friday but logged a second consecutive week of declines as soaring tech shares face growing profit-taking pressure. The Hong Kong market rose as Lenovo Group’s forecast-smashing results boosted sentiment.
China’s blue-chip CSI300 Index ended the session up 1.3 percent, but was down 0.3 percent for the week.
The Shanghai Composite Index, which on Thursday logged its biggest drop since March, rebounded 0.9 percent. In Hong Kong, benchmark Hang Seng advanced nearly 1 percent, led by tech shares as Lenovo surged 20 percent to its highest level in 26 years.
China stocks have been climbing this year as AI-led optimism helps overcome investor worries about the broader economy.
BNP Paribas said there’s a dramatic improvement in earnings expectations in China and some other Asian economies, but “this is, however, not a broad-based story but one nearly entirely driven by the tech super-cycle.”
The bank warned that “any reversal of the (tech) cycle will create a material headwind to regional equities,” but “in the near-term, it remains the only story.”
Goldman Sachs also painted a picture of a bifurcated Chinese economy where the red-hot tech sector contrasts with ailing “old economy” industries.
“The ongoing Middle East conflict and higher energy prices have negatively impacted the Chinese economy,” Goldman Sachs said in a note. However, “the Chinese economy has so far been more flexible than expected in adapting to higher oil prices.”
The Wall Street bank said investors should closely monitor Chinese exports, which have been a key growth engine. It added that “there have been some encouraging signs from the property market in top-tier cities.”
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