Chinese stocks rebound on state-backed buying, but weekly losses persist

Chinese stock markets rebounded on Friday as state-backed buying supported investor sentiment. The Shanghai Composite rose 0.89% to close at 3,690.5, while the Shenzhen Component gained 2.79% to 11,673.8, recovering from a more than two-month low in the previous session.

Trading activity in nine ETFs favoured by state-backed investors reached CNY 60 billion ($8.99 billion). The E Fund ChiNext ETF attracted CNY 15 billion in inflows, its highest level since July. Combined net inflows into these ETFs reached CNY 46 billion on Thursday, the largest since the April 2025 market selloff.

Authorities have stepped up efforts to ease selling pressure and stabilise the equity market following a slowdown in the rally triggered by stimulus measures in late 2024.

AI-related stocks also recovered, with Cambricon Technologies rising 5.46%, SMIC gaining 4.01% and Zhongji Innolight advancing 3.82%. Despite Friday?s gains, the Shanghai Composite fell 0.69% for the week, while the Shenzhen Component declined 1.09%.

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