Chinese Stocks Ride Wave of Month-End Global Rallies

Chinese stocks joined global stock markets ending November on an upbeat note as fears of an AI bubble receded and hopes for a US cut in interest rates rose. A phone call between Chinese President Xi Jinping and US President Donald Trump on Monday eased trade-friction concerns.

The Shanghai Composite Index gained 1.4 percent for the week after a 0.34 percent rise on Friday, ending at 3,888 points. The Shenzhen Component Index posted a 3.65 weekly gain, while the tech-heavy ChiNext board also jumped 3.6 percent. Hong Kong's Hang Seng Index climbed 2.5 percent, even as the apartment complex fire that killed at least 128 people dominated local headlines in the last two trading days.

On Monday, Xi and Trump discussed bilateral relations, with Trump saying later that "our relationship with China is extremely strong." In a separate phone call, Trump urged Japanese Prime Minister Sanae Takaichi to dial down tensions with China and stop commenting on Taiwan.

"Bolstered by the phone calls, traders were relieved," said Xu Jiaqi, an analyst with Western Securities. "At the same time, talk about the AI bubble seemed to taper off after weeks of hot debate."

Kinger Lau, chief equity strategist at US investment bank Goldman Sachs, said this week that the Chinese boom in artificial intelligence-related stocks isn't a risky bubble. His view was echoed by consulting and accounting firm EY.

"The technology sector, especially those related to AI, has become a major force driving up the performances of China's stock market and initial public offerings," said Lawrence Lau, leader of financial accounting advisory services at EY China. "Such momentum is expected to run into the next year with more relevant listings in both Chinese mainland and Hong Kong markets."

The firm is forecasting that Hong Kong exchange will end the year as the world's top venue for new listings, with the Shanghai Stock Exchange expected to rank fifth.

Disappointing results from several big Chinese companies this week failed to dent positive sentiment. E-commerce and technology giant Alibaba reported a 52 percent drop in third-quarter profit and rival Meituan posted its first loss in three years as their fast-delivery war burned through cash. In the car sector, Li Auto, Nio and Guangzhou Auto reported losses, but Changan Auto eked out a 2 percent rise in profit. Robotaxi firm posted a wider third-quarter loss. In the property market, developer Vanke's announcement that it is seeking creditor approval to delay payment on a bond due December 15 stirred fears of default.

Across Asia, Japan's Nikkei advanced 3.4 percent this week, and South Korea's Kospi edged up 0.29 percent. In New York, where stock markets closed for the Thanksgiving holiday on Thursday and traded for a half-day on Friday, the tech-heavy Nasdaq ended the week up 4 percent but lost almost 2 percent for the month of November. The S&P 500 rose 5 percent in the week and posted its seventh consecutive monthly gain. In Europe, the Stoxx600 index gained 0.25 percent on Friday, chalking up its fifth straight monthly gain.