Chinese stocks rise 0.4% but face near-1% weekly decline amid AI cooling
China's blue-chip indices climbed on Friday as liquor shares led gains, yet momentum in artificial intelligence stocks faded causing major benchmarks to end the week lower.
China's main stock markets advanced on Friday, but analysts warn that the weekend will likely see significant losses. The CSI300 Index rose 0.4% while the Shanghai Composite Index also gained 0.4% by midday. In contrast, the Hang Seng Index in Hong Kong climbed 2.1%. Despite these daily gains, data indicates the CSI300 is projected to finish the week nearly 1% lower. The CSI Artificial Intelligence Index fell 0.2%, contributing to the STAR50 Index dropping 0.7% for the week.
Investors rotated funds away from artificial intelligence supply-chain stocks toward consumer staples. Shares of Kweichow Moutai increased 2.4% as demand in traditional sectors outpaced technology holdings. Market sentiment remains subdued due to worries about rising U.S. Treasury yields and weak domestic economic data. Morgan Stanley analysts lowered their price targets for Chinese equity indexes, citing tighter liquidity conditions and regulatory uncertainty. Consequently, investors are shifting focus from high-growth tech narratives toward more defensive consumer goods.
