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View all search resultsChina stocks set for biggest weekly pullback in five months
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An electronic board shows Shanghai and Shenzhen stock indices in Shanghai, China, on April 16, 2025. (Reuters/Go Nakamura)
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hina's stocks steadied on Friday after steep losses in the previous session, but remained on course for their biggest weekly falls in five months as market participants took profits following a two-month rally.
The Shanghai Composite Index lost 0.1 percent in early trade. The benchmark has now declined 2.5 percent this week, on track for the sharpest weekly drop since early April.
China's blue-chip CSI300 Index swung between gains and losses in the opening hour, and by mid-morning was down nearly 3 percent for the week, set for the biggest decline since December.
Tech shares led the pullback this week, with the AI sector down 9.2 percent and the semiconductor sector dropping 8.9 percent. Chip designer Cambricon sank more than 18 percent, putting it on track for its biggest weekly loss in nearly two years.
Selling pressure carried over into Friday as profit-taking gathered pace following the conclusion of China's largest-ever military parade, while a Bloomberg News report that Beijing is considering measures to curb excessive stock speculation led to market jitters.
The correction 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.
"Risk appetite is weakening as outsized gains triggered profit-taking and a technical correction," analysts at China Securities wrote in a note, adding that trading could remain volatile as the market enters a consolidation period.
China's central bank said on Thursday it would inject 1 trillion yuan into the banking system on Friday via outright reverse repo operations to keep liquidity "reasonably ample", interpreted by some as a gesture to calm investors.
"Taking some of the air out of the frothy part of the market is setting up for a more sustainable path down the line," said Jerry Wu, a portfolio manager at Polar Capital, based in London.
"It will be a healthy correction and I don't think it changes the direction of travel, which we do believe is a sort of innovation-driven rally."
Hong Kong's benchmark Hang Seng was up 0.5 percent on Friday, heading to a weekly gain of 0.1 percent.
