The Shangai Composite Index Closes 2.05% Higher

The Shanghai Composite slipped 1.4% to 3,637 on Friday, while the Shenzhen Component slid 2% to 11,242, with both indexes snapping a two-session winning streak and tracking losses across Asian markets, weighed down by a significant selloff in the technology sector. While investors initially anticipated that a Democratic sweep of the US Congress would accelerate efforts to end the Iran war, those geopolitical expectations were overshadowed by growing concerns over potential regulatory headwinds for the AI and data center industries, which could cloud the funding outlook for data infrastructure. Eoptolink Technology and Zhongji Innolight cratered 12.5% and 12.3% respectively, while Cambricon Technologies dropped 5.8%, Hygon Information Technology lost 3.1%, and SMIC and NAURA Technology both declined 3.0%. Despite Friday’s sharp retreat, both indexes still managed to lock in overall gains for the week.

The Shangai Composite Index gained 0.7 points or 0.02 percent on Thursday to close at 3687 points. Gains were led by Yonyou Soft (4.23%), Hengli Petrochemical (4.12%) and LONGi Green (3.92%). Biggest losers were Petrochina (-8.15%), China Coal (-6.66%) and China Shenhua Engy (-6.41%).

The Shanghai Composite edged up 0.10% to close at 3,689.9 on Thursday, while the Shenzhen Component advanced 1.19% to 11,471.1, extending gains from the previous session as Beijing’s latest intervention measures continued to lend support to equities. Earlier this week, Chinese authorities rolled out a series of measures, including targeted liquidity injections, lower interest rates on stock buyback loans, and eased restrictions on leveraged trading. However, investors remained cautious, with a sustained market recovery seen as dependent on stronger economic growth, improving corporate earnings, and a revival in investor confidence. CATL (4.42%), BYD (1.29%), NAURA Technology (4.76%), and Luxshare Precision Industry (2.73%) posted notable gains. In contrast, energy stocks underperformed, with PetroChina (-7.93%), CNOOC (-6.55%), and Sinopec (-0.87%) declining sharply as oil prices weakened on growing hopes of a potential peace deal between the US and Iran.