Tension Rises as U.S.-China Tech Spat Hits Markets

Chinese and Hong Kong markets dropped due to U.S.-China tech tensions and disappointing Alibaba earnings. Despite these challenges, both markets saw a positive end to the week. The U.S. contemplates further restrictions on Chinese companies, affecting market sentiment as geopolitical competition shifts focus to tech and healthcare.

Chinese and Hong Kong stock markets faced setbacks on Friday amid escalating U.S.-China technology tensions and discouraging earnings from Alibaba Group. However, both markets ended the week on a positive note, with notable gains reflected in the Hang Seng Index.

The Shanghai Composite index dropped by 0.4%, while China's blue-chip CSI300 index decreased by 0.46%, led by steep declines in liquor and insurance stocks at 1.4%. In Hong Kong, the Hang Seng Index likewise fell by 0.46%, with Alibaba Group's shares diving over 4% after disappointing quarterly revenue data.

On the geopolitical stage, the U.S. Commerce Department is mulling over adding more Chinese companies to its restricted export list, including ChangXin Memory. The scrutiny extends to subsidiaries of key firms like Semiconductor Manufacturing International Corporation. Analysts highlighted that while the tariff truce was welcomed, the complex U.S.-China relations make lasting solutions elusive.

(With inputs from agencies.)