Chinese equities recovered from 14-month lows on Friday as share buyback announcements and stronger earnings forecasts from artificial intelligence (AI) companies helped stabilise sentiment. However, the rebound did little to offset a difficult week for the market, with concerns over global borrowing costs, domestic demand and liquidity continuing to weigh on the outlook.
The CSI 300 index, which tracks major companies listed in Shanghai and Shenzhen, closed 0.1% higher, while the Shanghai Composite gained 0.2%. Despite the improvement, the CSI 300 fell 3.4% over the week, its weakest weekly performance since mid-July and the latest decline in a 10-week losing streak.
The recovery followed a period of heavy selling in technology shares, as investors reassessed the scale of spending on AI infrastructure and the financial risks associated with funding further expansion. Rising borrowing costs have added to concerns about whether the investment required to support AI development can generate sufficient returns.
A rebound in global equities also helped improve sentiment. Asian markets recovered after US shares strengthened overnight, following a sharp sell-off in AI-related stocks earlier in the week. Hong Kong’s Hang Seng Index also rose, while technology shares in mainland China stabilised after recent losses.
Share buyback announcements provided additional support. At least 10 companies in China’s AI supply chain announced plans to repurchase shares or increase stock purchases. These included Eoptolink, an optical transceiver manufacturer, and Piotech, a semiconductor equipment company.
Earnings expectations also helped underpin the recovery. Chipmakers MetaX Integrated Circuits and Hygon Information Technology issued third-quarter profit forecasts pointing to strong growth. These updates offered evidence that parts of China’s semiconductor and AI-related technology sector continue to experience demand, despite the recent weakness in share prices.
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