China stocks rebounded on Friday after a sharp selloff in chipmakers in the previous session, while Hong Kong shares extended gains as a tepid U.S. jobs report reinforced bets that the Federal Reserve would keep monetary policy supportive.
** As of midday, the Shanghai Composite index SSE:000001 inched up 0.6%, while the blue-chip CSI300 index SZSE:399300 gained 1.2%.
** The tech-focused STAR 50 index SSE:000688, which suffered its biggest one-day decline since April 2025 on Thursday, advanced 1.1%.
** Robotics shares led gains, with a sector sub-index (.CSIH30590) jumping 5.7% after China's securities regulator approved Unitree's Shanghai IPO late on Thursday.
** In Hong Kong, the Hang Seng Index HSI:HSI advanced 1.6%, while the city's tech shares (.HTECH) jumped 2%.
** U.S. job growth slowed sharply in June, signalling a cooling labour market and prompting investors to scale back expectations for higher U.S. interest rates.
** "We believe the incrementally bigger representation of the tech- and innovation-heavy sectors in the A-share market will continue, with clear policy, funding, resources and capital market action support," analysts at Morgan Stanley said in a note.
** "As a result, we see the best opportunities at the index level as offered by the A-share market."
** Investors are closely watching June economic data due in the coming weeks for fresh clues on the strength of China's economic recovery.
** "Monthly indicators could show signs of stabilisation," Citi analysts said in a note.
** "Investment remains a drag... This set of data is unlikely to shift the tone of the mid-year Politburo meeting."