Chinese Stocks End Week on Optimism About AI, Duty-Free Port

Chinese investors were buoyed this week by the stellar trading debut of MetaX and the launch of the nation's first special customs operations zone on the island province of Hainan, pushing stock markets higher on Friday after a choppy few days of trading.

The benchmark Shanghai Composite Index rose 0.36 percent on Friday and concluded the week with an uptick of 0.03 percent. The Shenzhen Component Index jumped 0.66 percent on Friday but dropped 0.9 percent for the week. The tech-focused ChiNext gained 0.5 percent to end the week up 1.2 percent.

"The broad-based rally on Friday indicated that short-term selling pressure has abated and market sentiment improved moderately after the Hainan duty-free policies became more widely known," said Liu Gaochang, an analyst with Guosheng Securities. But he said the absence of notable rises in trading volume could point to underlying weakness in sentiment.

The special customs operations of Hainan official began on Friday, marking one of China's biggest trade liberalism policies in years and signaling the nation's continued commitment to wider opening of its economy. Now the largest duty-free port in the world by area, the island allows imported goods to enter with no tariffs, and it streamlined customs procedures.

Meanwhile, the debut of Shanghai-based AI chipmaker MetaX on the Shanghai STAR Market on Wednesday highlighted enduring investor enthusiasm for advanced technology shares. The company's share price surged nearly 700 percent above its offer price on its first day of trading, though it retreated somewhat on the last two days of the week as investors took profits. By the end of the week, MetaX was valued at 330 billion yuan (US$47 billion).

Both events overcame concerns about China's economy, which produced soft data this week in retail sales, industrial production, fixed-asset investment and property transactions.

Standard Chartered bank is forecasting that China stocks will rally in 2026, citing their relatively cheaper valuations and growth potential, likely easing of Chinese mainland monetary policy, and strong investment in artificial-intelligence technologies. Raymong Cheng, chief investment officer for North Asia at the bank, said targeted economic stimulus under China's 15th Five-Year-Plan (2026-2030) also will underpin strong equity market performance.

In a separate report, consultancy firm Deloitte forecast robust IPO markets ahead for both Chinese mainland and Hong Kong.

"The A-share IPO market in 2025 is set to outperform 2024, with the Shanghai Stock Exchange remaining the 5th largest stock exchange in the world by funds raised," said Stephen Hu, a partner of Deloitte China's Capital Market Services Group. He added that IPOs will likely pick up next year.

In Hong Kong, the Hang Seng Index lost 1.1 percent for the week. Japan's Nikkei dropped 2.6 percent, and South Korea's Kospi slumped 3.5 percent.

New York markets rose on Friday, snapping a multiple-day losing streak triggered by investor concerns over the high levels of debt incurred in AI company expansion. For the week, the S&P 500 index eked out a 0.1 percent gain, while the Nasdaq advanced 0.5 percent. Oracle shares rebounded 6.6 percent on Friday from heavy losses earlier in the week, after Chinese-owned TikTok agreed to sell majority control of its US operations to a new joint venture that includes Oracle and private equity firm Silver Lake, staving off a ban on its platform in the US. In Europe, the Stoxx600 index ended up 0.4 percent on Friday.