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 is still on track for 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.
Jitters also eased in China, where the blue-chip CSI300 Index was up 0.8% by the lunch break, while the Shanghai Composite Index rose 1%.
Still, the CSI300 Index is poised to drop roughly 3% for the week, the worst showing since July. The gauge is also set to record a 10-week losing streak.
Tech shares recouped some of their recent losses 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 a China equity strategy report on Friday. "Weak domestic demand and less-supportive liquidity and flows continue to limit index upside."
At a meeting in Bangkok on Friday, US Federal Reserve chair Kevin Warsh said he was optimistic about the impact of AI and believed it would change the real economy, but its near-term impact on employment was uncertain.
Warsh also said the Fed needed to think about financial stability risks, as traders closely monitor the US monetary policy path.
Real estate, gold and defense stocks led the gains in China on Friday, rising more than 3%.
In Hong Kong, biotech and property shares jumped.