Chinese Stock Markets Wrap Up First Half With Tech-Driven Gains

China's stock markets wrapped up the first half with gains powered by technology shares. The benchmark Shanghai Composite index rose 3.2 percent, with the tech-focused STAR Market 50 index surging 64 percent. The Shenzhen Composite Index gained 19.8 percent, with its ChiNext board jumping 26 percent. The market capitalization of all mainland-listed stocks in the first half rose 9.4 percent to 119 trillion yuan (US$17.6 trillion).

For the week ended, the Shanghai index rose 0.4 percent on Friday, for a weekly gain of 0.4 percent. The Shenzhen index gained 0.6 percent but fell 1.2 percent in the past five trading days, with the ChiNext losing 4.7 percent for the week.

"Investors have built up confidence, with huge volatility from the Iran war and a global selloff of tech shares failing to shake the foundation of domestic markets," said Zhou Peng, an analyst with China International Capital Corp. "Investors will be closely watching second-quarter financial results and hoping for a speedy end to the conflict in the Middle East."

Chip startup Cambricon, sometimes called "China's Nvidia," captivated attention on Tuesday with a 7.7 percent surge to become the first stock on the STAR Market to hit a capitalization of 1 trillion yuan. But the shares closed the week down 8.7 percent following three consecutive days of losses after the rally.

Shares in BYD, China's largest electric carmaker, surged 15 percent in Hong Kong this week after it led Chinese mainland industry sales in June with a 5.5 percent increase from a year earlier to 403,472 new-energy vehicles. Overseas sales, including passenger cars and pickup trucks, surged 95 percent to 174,897 units.

The market regulator announced that Chinese stock exchanges will allow investors an extra 30 minutes to execute trades, starting Monday with an after-hours market session from 3-3:30pm. The move aligns Chinese mainland markets with most Western bourses. The regulator also announced proposed rules to loosen refinancing for listed companies, set to come into effect in 2027.

Hong Kong's Hang Seng Index advanced 1.3 percent on Friday to end with a weekly gain of 3 percent, as new technology IPOs from China's mainland continued to garner investor enthusiasm in trading debuts, with a pipeline of major share sales set to begin.

Elsewhere in Asia, Japan's Nikkei rose 0.6 percent this week. South Korea's Kospi surged 5.8 percent on Friday but retreated 3.8 percent for the week as chipmakers SK Hynix and Samsung Electronics felt the sting of a global selloff in semiconductor shares.

On Wall Street, markets were closed for the extended July 4 holiday weekend. The Dow Jones Industrial Average ended at a record high on Thursday as investors bet weaker-than-expected jobs growth in June will forestall any Fed rate hike, despite high inflation. The tech-heavy Nasdaq Composite continued to suffer from a slump in semiconductor shares, dropping 0.8 percent on Thursday. For the week, however, the Nasdaq close up 2.1 percent and the broad-based S&P 500 rose 1.8 percent.

According to a briefing by Goldman Sachs, expectations for second-quarter earnings are high after companies "comfortably" beat analysts' estimates at the start of the year. The bank's research team forecasts 24 percent full-year, per-share earnings growth for S&P 500 companies.