Chinese stocks rebounded for the first time in 3 weeks last week, as expectations for economic support from the NPC Standing Committee and earnings trends at major companies influenced the market. Key developments during the week and toward its close are outlined below.
In China's stock market during the previous week (24th-28th), the Shanghai Composite Index closed at 3952.18 on the 28th, up 1.2% from the previous day, marking its first weekly rebound in 3 weeks. The market continued to fall at the start of the week, but rebounded from the 25th, rising for 3 consecutive days through the 27th.
In the first half of the week, reports that Alibaba planned to raise approximately $10 billion through a new share issue heightened concerns over investment in AI-related areas, prompting selling in technology stocks. At the same time, buying prevailed as expectations grew for signals of fiscal stimulus measures at the NPC Standing Committee to support growth, pushing the market higher.
In the second half of the week, Nvidia's latest quarterly earnings were strong, and buying spread across Chinese technology stocks and AI-related supply-chain stocks amid a broader rise in overseas equities. Expectations for economic support from the NPC Standing Committee were also viewed as a supporting factor for the market.
Toward the end of the week, market sentiment weakened due in part to the impact of rising long-term U.S. interest rates, and selling emerged mainly in biotechnology and semiconductor stocks. Warnings of sanctions against China by President Trump were also reported as a selling factor. Attention will focus on the release of major economic indicators from 31 August to 4 September and developments in U.S.-China relations.