China stocks rebound from 14-month lows as AI firms unveil buybacks, stellar forecasts

By Reuters News

SHANGHAI Oct 16 (Reuters) - China stocks rebounded on Friday from the previous session’s 14-month lows, after a slew of AI-related companies proposed share buybacks or forecast stellar growth, but the market still registered its worst week in three months.

** Sentiment was also aided by a rebound in global equities following Thursday’s savage selling in AI stocks triggered by concerns over big spending on AI infrastructure as borrowing costs rise.

** Stocks in South Korea .KS11 and Japan .N225 bounced after an overnight rebound on Wall Street. In Hong Kong, the Hang Seng Index rose 0.5%.

** Jitters also eased in China amid signs the government is stepping up support to the stock market.

** The blue-chip CSI300 Index .CSI300 ended up 0.1%, while the Shanghai Composite Index .SSEC edged up 0.2%.

** Still, the CSI300 Index dropped 3.4% for the week, the worst showing since mid-July, capping a 10-week losing streak.

** Tech shares .STAR50 stabilised after at least 10 AI supply chain companies, including optical transceiver maker Eoptolink 300502.SZ and chip equipment maker Piotech 688072.SS, announced share buyback or stock purchase plans.

** In addition, a string of tech companies including chipmakers MetaX Integrated Circuits 688802.SS and Hygon Information Technology 688041.SS published third-quarter profit forecasts that signal torrid growth.

** "Sentiment remains subdued amid global liquidity headwinds," Morgan Stanley said in its China equity strategy report on Friday. "Weak domestic demand and less-supportive liquidity and flows continue to limit index upside."

** Stirring speculation of government support, trading volume spiked in late-session trading of several exchange-traded funds favoured by state-backed investors, dubbed the "National Team".

** In addition, Bloomberg News reported on Friday that regulators have urged companies and state funds to buy shares while guiding some investors to curb selling.

** Real estate .CSI000948 and defense .CSI399973 stocks led the gains in China on Friday, rising more than 3%.

** In Hong Kong, biotech .HSIDI and property shares .HSMPI jumped.

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