Chinese stocks closed higher on Friday, benefiting from the performance of tech stocks.
The benchmark Shanghai Composite Index went up 0.87 percent to close at 4,112.90 points, while the Shenzhen Component Index climbed 2.3 percent to 15,597.30 points.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 2.84 percent to close at 3,938.50 points on Friday.
Timothy Pope, a China Global Television Network (CGTN) market analyst, recapped on the day's market developments from Shanghai, noting the strong performance of tech stocks contributed to the rally of A-shares.
"Today, the markets rebounded from a pretty bruising Thursday session. The Shanghai Composite Index was up 0.9 percent, largely thanks to tech stocks. Investors rush back to buying tech shares can really be seen as well by the 2.3 percent jump for the Shenzhen Component Index and the 2.8 percent gain for the small cap ChiNext forward. Both of those are more tech and new industry heavy than the Shanghai Composite, which has a lot of old economy stocks as well. But despite today's gains, it was the worst week the market on the Chinese mainland has had for more than a month," said Pope.
The Shanghai Stock Exchange (SME) approved a plan by Semiconductor Manufacturing International Corporation (SMIC), the country's leading chipmaker, to acquire the remaining 49 percent stake in its subsidiary Semiconductor Manufacturing North China (Beijing) Corporation, or SMNC, for 40.6 billion yuan (about 5.98 billion U.S. dollars) through share issuance, marking the largest merger and acquisition deal since the inception of China's STAR Market.
"Chipmaker SMIC was actually one of the most visible gainers this session. It was up 3.2 percent in Shanghai after the securities regulator approved its plan to buy the remaining 49 percent of Beijing-based chip maker SMNC -- the 49 percent that it doesn't already own. So for that's going to be more than 40 billion yuan. SMNC is going to become a wholly owned subsidiary of SMIC. And that was welcomed by both Chinese mainland and Hong Kong investors today," he said.
"The big lesson I think from the markets performance over the last couple of weeks is just how beholden the recent market rally is to tech shares like this. AI and semiconductor stocks are the foundation for the bullish sentiment at the moment, and there really isn't any other sector that's grabbing investor attention in this really positive way. AI is still the only show in town, which is why we're seeing the fluctuations that have characterized trading over the last couple of weeks," said the analyst.
China shares close higher on tech rally
