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.
** At the close, the Shanghai Composite index SSE:000001 inched up 0.4%, while the blue-chip CSI300 index SZSE:399300 gained 0.6%.
** For the week, the SSEC rose 0.4%, but the CSI300 lost 0.5%.
** Robotics shares led gains, with a sector sub-index (.CSIH30590) jumping 6.2% after China's securities regulator approved Unitree's Shanghai IPO late on Thursday.
** In Hong Kong, the Hang Seng Index HSI:HSI advanced 1.3%, while the city's tech shares (.HTECH) closed up 1%.
** 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.
** "We are keen to see the final Q2 activity data for June, due in mid-July, for further signs that the economy is emerging from its soft patch in April and May," said Kelvin Lam, senior China+ economist at Pantheon Macroeconomics.
** "Even if activity remains sluggish, policymakers are likely to stick to only modest policy adjustments in the second half at the July Politburo meeting, rather than unveil a bazooka stimulus."