Trade War Tensions: Chip Stocks Lead Hong Kong, China Market Rebound

Hong Kong and China stocks reversed earlier losses on Friday, driven by a rally in chip shares and potential state interventions amid escalating U.S.-China trade tensions. Despite a rally, the Hang Seng Index experienced significant weekly losses, influenced by new tariffs and market stabilization efforts from Beijing.

Hong Kong and China stocks made a significant comeback on Friday, reversing a week's earlier losses. This positive shift was largely attributed to a rally in chip shares and hinted interventions by state entities, mitigating further downturns amidst worsening trade tensions with the United States.

The Hang Seng Index closed 1.1% higher after initially dropping 1.2% in early trading. The technology subindex led the recovery, soaring 1.8%. Notably, chipmakers like Hua Hong Semiconductor saw a surge of over 20% before settling with a 14% gain, while SMIC advanced by 6%.

Mainland stocks also saw recovery, with the Shanghai Composite and CSI 300 indices up by 0.5% and 0.4% respectively. The CSI Semiconductor Industry Index had notable gains of 2.7%. Despite Friday's recovery, the overall weekly performance showed significant losses due to the ongoing trade conflict, with efforts from Beijing to stabilize markets through state funds noted.

(With inputs from agencies.)