SHANGHAI: China stocks rebounded on Friday from the previous session’s 14-month lows, after a slew of AI-related companies proposed share buybacks or forecast stellar growth, but the market still registered its worst week in three months.
Sentiment was also aided by a rebound in global equities following Thursday’s savage selling in AI stocks triggered by concerns over big spending on AI infrastructure as borrowing costs rise.
Stocks in South Korea and Japan bounced after an overnight rebound on Wall Street. In Hong Kong, the Hang Seng Index rose 0.5%.
Jitters also eased in China amid signs the government is stepping up support to the stock market.
The blue-chip CSI300 Index ended up 0.1%, while the Shanghai Composite Index edged up 0.2%.
Still, the CSI300 Index dropped 3.4% for the week, the worst showing since mid-July, capping a 10-week losing streak.
Tech shares stabilised after at least 10 AI supply chain companies, including optical transceiver maker Eoptolink and chip equipment maker Piotech , announced share buyback or stock purchase plans.
In addition, a string of tech companies including chipmakers MetaX Integrated Circuits and Hygon Information Technology published third-quarter profit forecasts that signal torrid growth.
"Sentiment remains subdued amid global liquidity headwinds," Morgan Stanley said in its China equity strategy report on Friday. "Weak domestic demand and less-supportive liquidity and flows continue to limit index upside."
Stirring speculation of government support, trading volume spiked in late-session trading of several exchange-traded funds favoured by state-backed investors, dubbed the "National Team".
In addition, Bloomberg News reported on Friday that regulators have urged companies and state funds to buy shares while guiding some investors to curb selling.
Real estate and defense stocks led the gains in China on Friday, rising more than 3%.
In Hong Kong, biotech and property shares jumped. - Reuters
