Chinese stocks were largely steady on Friday as gains in property shares helped offset declines in biotechnology and semiconductor stocks, while Hong Kong equities advanced following an overnight rally on Wall Street, Reuters reported.
The Shanghai Composite Index edged up 0.1%, while the blue-chip CSI300 Index slipped 0.1%. In Hong Kong, the Hang Seng Index gained 0.5%.
A-Share Sentiment Softens
Investor sentiment toward China's A-share market has weakened as U.S. Treasury yields have risen, Morgan Stanley said, according to Reuters.
The investment bank, however, expects market conditions to improve as excess liquidity pressures ease and global enthusiasm for artificial intelligence-related investments regains momentum.
Concerns about liquidity withdrawals have increased alongside several large initial public offerings, including the much-anticipated listing of chipmaker CXMT. Large IPOs can absorb significant amounts of available market liquidity, potentially putting pressure on equities in the short term.
Nvidia Boosts Global AI Trade
Chinese semiconductor stocks came under pressure on Friday despite rebounding earlier in the week. The weakness followed gains in U.S. technology stocks overnight, where the Nasdaq outperformed other major indexes.
Reuters reported that Nvidia's stronger-than-expected revenue outlook reinforced investor confidence in the artificial intelligence boom and helped drive gains across technology stocks.
The positive global backdrop for AI stocks has nevertheless failed to provide a broad boost to Chinese chipmakers, with investors remaining cautious about valuations, liquidity conditions and the outlook for the domestic technology sector.
Biotechnology stocks were also among the biggest decliners in China's markets on Friday.
Property Stocks Rally Despite Sector Weakness
Property shares moved higher, bucking signs of continued weakness in China's troubled real estate sector.
The prolonged property downturn remains an important factor behind the uneven nature of China's economic recovery, Morgan Stanley said, according to Reuters.
The bank also indicated that weaker-than-expected economic growth could increase expectations for additional policy support later this year.
Morgan Stanley sees the possibility of a broader rebound in Chinese equities if stronger economic and policy signals are confirmed.
Hong Kong Markets Gain
In Hong Kong, materials, media and information technology stocks were among the stronger performers. Semiconductor and shipping stocks, meanwhile, were among the biggest decliners.
The mixed performance highlights the cautious tone across Chinese markets, with investors balancing optimism over global technology stocks against concerns surrounding domestic growth, property-sector weakness and liquidity conditions.
For now, China's equity markets remain sensitive to both global developments, particularly U.S. interest rates and the AI investment cycle, and signals from Beijing on furth
