China stocks snap three-day slide on chip optimism, but set for weekly loss
China stocks edged higher on Friday, ending a three-day losing streak due to optimism around domestic chipmakers. The Shanghai Composite Index rose 0.1%, while the blue-chip CSI 300 Index gained 0.1%. Moore Threads Technology surged fivefold in its debut, driven by expectations of benefiting from Beijing's push for domestic chip production. Despite the gains, major indexes are set for a weekly decline. The property sub-index continued to slide, and Hong Kong's Hang Seng Index slipped 0.2%.
HONG KONG, Dec 5 (Reuters) - China stocks edged higher on Friday, snapping a three-day losing streak, on renewed optimism surrounding domestic chipmakers, although major indexes remained on course for a weekly decline.
By the midday break, the Shanghai Composite Index (.SSEC) was up about 0.1% at 3,878.98, after spending much of the morning under pressure.
The modest advance put the benchmark index on track for its first daily gain after three consecutive declines, but it remained 0.3% lower for the week amid a lack of fresh catalysts ahead of a key policy meeting.
The blue-chip CSI 300 Index (.CSI300) edged 0.1% higher and has gained 0.6% so far this week.
The spotlight on Friday was on Moore Threads Technology Co (688795.SS) , often called “China’s Nvidia”, which surged roughly fivefold in its trading debut, reflecting expectations that the U.S.-sanctioned firm will gain from Beijing’s push to strengthen domestic chip production.
Its explosive debut followed news that a bipartisan group of U.S. senators introduced a bill on Thursday aiming to prevent the Trump administration from easing restrictions on China’s access to advanced AI chips from Nvidia (NVDA.O) and AMD (AMD.O) for the next 2.5 years.
China’s tech breakthroughs, as well as “national pride” amid U.S.-China geopolitical tensions, are set to continue being a main pillar for the slow bull market for the next 6-12 months, according to Patrick Pan, China equity strategist at Daiwa Capital Markets in Hong Kong.
“From a longer-term perspective, we believe the recent pullback of China equities should have freed up more upside for the next year,” he said in a note.
The property sub-index extended its slide, with the CSI 300 Real Estate Index (.CSI000952) down more than 2%.
China’s home prices are forecast to decline 3.7% this year, and likely to fall through 2026 before stabilising in 2027, according to the latest Reuters survey.
In Hong Kong, the benchmark Hang Seng Index (.HSI) slipped 0.2%, but was still on track to post a weekly gain. The tech index (.HSTECH) also lost 0.2%.
