SHANGHAI: China stocks fell on Friday but were on track to end the week near their highest level in 3-1/2-years, as investor sentiment remained upbeat on growing confidence in the country’s artificial intelligence potential.
China’s blue-chip CSI300 Index was down 0.4% by the lunch break, while the Shanghai Composite Index lost 0.2%. Hong Kong benchmark Hang Seng was down 0.7%.
The CSI300 Index has climbed nearly 2% so far this week, hitting its highest point since February 2022. The Hang Seng Index slipped nearly 1%, but still hovered near its strongest level since July 2021.
Confidence in China’s AI capabilities continued to strengthen this week, driving gains in domestic markets. Shares of tech giant Alibaba soared to a four-year high as the company increasingly prioritizes AI as a central focus alongside its traditional e-commerce business.
Onshore artificial intelligence shares climbed more than 4% this week, after surging nearly 70% year-to-date.
While shares listed in Hong Kong have historically outperformed during US rate-cut cycles, UBS analysts maintained a preference for onshore shares, the so-called A-shares, citing potentially stronger support from domestic retail inflows over foreign institutional participation. Sector-wise, they favour AI-related themes, brokers and high-dividend stocks.
Tech majors listed in Hong Kong were roughly flat this week.
Real estate shares rose as much as 3%, after state media reported several emerging first-tier cities are studying new policy measures for the real estate market.
Hong Kong-listed innovative drug index fell as much as 3%, after US President Donald Trump threatened 100% tariffs on imports of branded pharmaceuticals from October 1.
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