Chip Surge Fuels Hong Kong and China Stock Rally Amid Trade War Tensions

Hong Kong and China stocks recovered some weekly losses on Friday, fueled by a surge in chip shares and potential state intervention, despite ongoing trade tensions with the U.S. Both the Hang Seng and Shanghai Composite Index rebounded, although weekly declines remained significant.

In a remarkable turnaround, Hong Kong and China stocks recouped earlier losses on Friday. This recovery was driven by a substantial rally in chip shares, along with speculation of state buying, in spite of the intensifying U.S.-China trade war.

The Hang Seng Index saw an impressive gain of over 2% during afternoon trading, counteracting an earlier 1.2% dip. The technology subindex soared 3%, with Hua Hong Semiconductor and SMIC leading the charge, posting gains of up to 20% and over 9% respectively.

The Shanghai Composite and CSI 300 Index also shed losses, climbing 0.6% and 0.5%. While the Hang Seng still faced a weekly loss of 7.7%, its biggest since October 2022, market intervention from Chinese state funds is believed to have driven a recovery in both regions.

(With inputs from agencies.)