China's blue-chip CSI300 index up 2%

China's blue-chip CSI300 index up 2%

On Friday, China's blue-chip CSI300 index rebounded by 2%, marking a significant recovery after a steep sell-off in the previous session. The index, which includes 300 of the largest and most liquid stocks listed on the Shanghai and Shenzhen stock exchanges, closed at 3,778.95, a 0.4% increase from its midday break. This rebound followed a week of substantial losses, with the index down 2.1% for the week, representing its largest weekly decline in five months [1].

The recovery was led by tech shares, which had been particularly hard hit during the correction. The AI sector, for instance, saw a 2.8% increase, while the semiconductor sector climbed by 1.6%. Chip designer Cambricon rebounded by 5.6% after a significant drop earlier in the week [2].

The selling pressure eased on Friday as profit-taking subsided following China's largest-ever military parade. Additionally, markets have largely shrugged off concerns raised by a Bloomberg News report suggesting that Beijing is considering measures to curb excessive stock speculation. The Chinese central bank also injected 1 trillion yuan ($139.80 billion) into the banking system via outright reverse repo operations to keep liquidity "reasonably ample," which was seen as a move to calm investors [2].

Analysts at China Securities noted that trading could remain volatile in the short term as the market enters a consolidation period. Jerry Wu, a portfolio manager at Polar Capital, stated that "taking some of the air out of the frothy part of the market is setting up for a more sustainable path down the line." He added that the decline this week snapped a two-month surge that had pushed Shanghai's benchmark to 10-year highs, powered by record sums of leveraged bets chasing the rally [2].

In Hong Kong, the Hang Seng Index (HSI) was up 0.6% on Friday, heading for a weekly gain of 0.1%, while the tech sector rebounded by 0.8% [2].

Despite the recent volatility, the AI semiconductor sector continues to undergo significant shifts. OpenAI's partnership with Broadcom to design custom AI chips aims to reduce reliance on Nvidia and AMD, while enhancing performance and supply chain resilience. This move signals a broader trend of tech giants prioritizing vertical integration to secure supply chains and optimize performance [3].

Investors should keep an eye on the strategic implications of these developments. Broadcom's AI revenue surged 220% in 2024 to $12.2 billion, driven by the acquisition of VMware and strong demand for datacenter chips and AI ASICs. The company projects a 65% annual growth rate by 2025, capitalizing on a $90 billion market opportunity for AI components by 2027 [3].

In conclusion, while China's stock market experienced a volatile week, the rebound on Friday indicates a stabilization in investor sentiment. The ongoing shift towards AI innovation and strategic partnerships in the semiconductor sector presents significant opportunities for investors, particularly those focused on AI-focused semiconductor equities.

References:
[1] https://finance.yahoo.com/quote/000300.SS/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3US02T:0-china-stocks-steady-after-selloff-set-for-biggest-weekly-drop-since-april/
[3] https://www.ainvest.com/news/strategic-implications-openai-custom-ai-chip-production-broadcom-ai-semiconductor-sector-2509/