Chinese Stocks Rebound, Slump in AI Shares Eases but Concerns Persist

China's stock markets rebounded on Friday amid signs of an agreement ending the Iran war, offsetting losses earlier in the week largely driven by a slump in tech shares amid investor concerns about the sustainability of the boom in AI-related companies.

The benchmark Shanghai Composite Index jumped 1.1 percent to end the week up 0.09 percent. The tech-focused Shanghai Star Market 50 index rose 0.05 percent on Friday, with leading chipmaker Cambricon surging 20 percent, but lost 0.3 percent for the week.

The Shenzhen Component Index rose 0.75 percent on Friday but declined 2.29 percent in the past five trading days, while the tech-heavy ChiNext added 0.5 percent on Friday but slumped 3.2 percent for the week.

"People still hold suspicions toward the boom of tech shares," said Xiao Jiewen, an analyst with China International Capital. "From time to time, they fear corrections, especially when there is a group of tech companies in the waiting line for initial public offerings."

In Hong Kong, the broad Hang Seng index rose nearly 2 percent on Friday but ended the week down almost 1 percent. Its tech subindex slumped 3.8 percent for the week. In the tech sector on Friday, Alibaba shares rose 2.6 percent, Tencent added 1.4 percent and Baidu rose 2.2 percent.

China's traditional blue chips stabilized A-share markets, with non-ferrous metals and financial stocks leading the gains. Shares of molybdenum producer Sheng Long Group jumped by the daily limit of 10 percent for two consecutive days, while Caida Securities and BOC International hit the daily limit on Friday.

Elsewhere in Asia, Japan's Nikkei rose 2.8 percent on Friday but fell 0.85 percent for the week. South Korea's Kospi advanced 4.6 percent on Friday but lost 0.45 percent in the five trading days.

South Korea's Samsung Electronics surged 7.9 percent on Friday but posted a loss of almost 2 percent for the week. Rival chipmaker giant SK Hynix gained 3.9 percent for the week, thanks to its partnership with Nvidia to expand supplies of advanced memory chips.

When Asian markets resume trading on Monday, investors will be assessing the implications for AI companies across the region after the blockbuster debut of Elon Musk's SpaceX IPO on Friday in New York. SpaceX shares surged 19 percent from their offer price to value the space and AI conglomerate at more than US$2 trillion yuan. The US$75 billion share sale is the world's biggest IPO, surpassing Saudi Aramco's listing in 2019.

The SpaceX debut and signs that the US and Iran may be close to signing a peace framework that will include reopening of the Strait of Hormuz energized Wall Street on Friday. The S&P 500 closed up 0.5 percent and the Nasdaq added 0.31 percent.

Shares in Nvidia, Advanced Micro Devices and Alphabet rose, but Broadcom, Palantir, Amazon and Meta closed lower. Global oil prices fell 6 percent this week to below US$90 a barrel on hopes of the strait reopening to oil and gas shipments from the Persian Gulf states but remained 20 percent higher than pre-war levels.