China stocks head for weekly loss as AI rally loses steam

According to Business Recorder, Chinese equities edged higher on Friday but appeared set for a weekly decline as enthusiasm for artificial intelligence shares faded. The CSI300 and the Shanghai Composite were each 0.4% firmer at the midday break, while the Hang Seng gained 2.1%. Concern about rising US bond yields also weighed on global stocks.

Over the week, the CSI300 was on course to finish close to 1% lower, whereas the Hang Seng was heading for a 0.6% gain. Consumer staples led onshore advances with a 2.6% rise as capital moved away from AI supply chain names into traditional industries, market participants said. Kweichow Moutai added 2.4%, while the tech-heavy STAR50 slipped 0.7% and sank nearly 4% during the week.

Morgan Stanley analysts cut their China equity index targets, citing a slower growth path, reduced liquidity, weaker fund flows and growing regulatory risk. Hong Kong shares gained after Federal Reserve Governor Christopher Waller said he leans toward holding rates steady at the coming policy meeting if upcoming inflation figures show price pressures easing further. Hong Kong-listed technology heavyweights recovered from a two-month trough, climbing 2.5%. Alibaba rose 3.4% while Xiaomi climbed 3.1% after agreeing a tie-up with German car dealers.