Chinese Stock Markets Reopen After Long Holiday, Eking Out Friday Gains

China's stock market trading resumed on Thursday after a seven-day holiday, with generally flat performances as investors reacted to global volatility that occurred during the break. However, afternoon trading on Friday was buoyed by market speculation that authorities were taking steps to stanch share-price slides. Trading activity in eight exchange-traded funds surged to 30 billion yuan (US$4.5 billion), their highest in nearly two months.

The benchmark Shanghai Composite Index edged up 0.05 percent on Friday but fell in 0.7 percent in the two trading days of the week. The Shenzhen Component Index lost 1.9 percent despite a gain of 0.17 percent on Friday, while the tech-heavy ChiNext tumbled 2.9 percent albeit gaining 0.2 percent on Friday. Chinese mainland volume totaled 1.9 trillion yuan (US$286.8 billion). The gains were led by AI video, precious metals and cybersecurity sectors, while computing hardware and wind power equipment extended declines.

"The performance of Chinese shares are largely affected by global markets after taking the weeklong respite, and it is still tech shares leading trading," said Dai Qing, an analyst with Changjiang Securities.

China's Guosen Securities said in a new report that the Chinese mainland bull market that began in September 2024 still has some room to run, despite a recent cooling in investor sentiment.

In Hong Kong, where the market was open all week, the Hang Seng Index surged 1.8 percent on Friday, a sharp turnaround from Thursday's loss of 1.4 percent. The benchmark index wrapped up the week with a gain of 1 percent.

Beijing-based Eswin Computing Technology debuted in Hong Kong on Friday, the first RISC-V-focused chip company to trade on the market. The shares closed flat from their offer price after an IPO that raised HK$2.3 billion (US$289 million).

On Thursday, shares of Chinese biotechnology stocks fell after a China-developed lung cancer drug failed clinical trials in the US. As a result, the Hang Seng biopharma index hosting many Chinese drug firms retreated 3.8 percent, among which Wuxi AppTec slumped 4.3 percent, BeOne Medicines declined 1.8 percent, Innovent Bio shed 5 percent and Akeso fell 3.1 percent. On Friday, the biopharma index slipped a further 0.05 percent, with Wuxi AppTec losing 0.5 percent and BeOne down 1.6 percent. However, Innovent recovered with a rise of 0.05 percent, and Akeso staged a 3.2 percent rally.

Meanwhile, Alibaba shares rose 2.6 percent on Friday in Hong Kong after analysts predicted the company will show a 50 percent surge in third-quarter revenue at its cloud and AI unit when it reports results next month. Car and smartphone maker Xiaomi surged 9.7 percent, Kuaishou Technology was up 5.5 percent and tech giant Tencent gained 3.3 percent.

Around Asia, Japan's Nikkei rose 1 percent this week. In South Korea, Samsung Electronics, the world's largest memory chipmaker, reported preliminary third-quarter operating profit of 107.4 trillion won (US$80.2 billion) on Thursday, a record high, but its shares dropped 2.4 percent on Friday. South Korea's Kospi index slumped 5 percent for the week.

On Wall Street Friday, the major markets rallied after a day-earlier selloff, despite elevated bond yields and oil prices above US$100 a barrel. Sentiment was buoyed by the US announcing a deal with Russia under which Moscow will provide 4 million barrels of diesel to US and global markets amid a supply crunch that has sent prices to a record high.

The broad S&P 500 index and the tech-heavy Nasdaq both rose 0.6 percent. The rally was led by tech shares that included SpaceX, Microsoft, CrowdStrike and Palantir Technologies. The earnings reporting season for the third quarter kicks off next week.