Broadcom lower-than-expected revenue contributes to Chinese shares weekly loss: analyst

The lower-than-expected revenue of the U.S. chipmaker Broadcom contributed to the renewed tech sell-off in the Chinese stock market this week, said a market analyst Timothy Pope on Friday.

Chinese stocks closed lower on Friday, with the benchmark Shanghai Composite Index down 0.74 percent to 4,027.74 points, and the Shenzhen Component Index closing 2.21 percent lower at 15,314.7 points.

Meanwhile, the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 3.2 percent to close at 3,957.93 points Friday, and the STAR Composite Index, which reflects the performance of stocks on China's sci-tech innovation board, closed 2.4 percent lower at 2,025.38 points.

"The markets here on the Chinese mainland ended the week with some modest losses again. For the week, the Shanghai Composite Index shed a little over a quarter of one percent. Today the index was down 0.7 percent. There was renewed selling in tech stocks. So, we saw the tech-heavy indexes lose out a little bit more. The Shenzhen Component [Index] 2.2 percent, the ChiNext board was down 3.2 percent and the STAR 50 off by 4 percent," said Pope.

He said the lower-than-expected revenue of Broadcom contributed to the tech selloffs that dragged the index down.

"There are two parts to this and the first shouldn't be underestimated, and that's just the general weekly cycle at the moment. The market seems to have entered a consolidation phase. While there's a will to invest, there's not a huge amount of risk appetite, so Friday profit taking has become the norm. The second part is the overnight news out of the U.S., where Broadcom, the chip maker, posted revenue, which was below what the market had been expecting and also notably a surprisingly soft forecast for its AI chip revenue for the current quarter. But for Chinese mainland investors, this Broadcom news is really more of a market sentiment spillover, I think, rather than any direct reflection on the local AI sector where we really have a lot of positive news lately. Still, we did see the big chip stocks down today - Hua Hong Grace, Cambricon, and Gigadevice - all of those traded pretty sharply lower," said Pope.

Pope said the financial sector led the gains with major banks being the biggest winners.

"Financials were picking up the slack a little earlier on in the session but they couldn't offset the losses. The big banks, though, accounted for most of the winners on the Shanghai Composite today. Bank of China, ICBC and Agricultural Bank of China were the top contributors to gains," said Pope.

Broadcom lower-than-expected revenue contributes to Chinese shares weekly loss: analyst

Broadcom lower-than-expected revenue contributes to Chinese shares weekly loss: analyst

Russian President Vladimir Putin said on Friday that Russia remains open to everyone who is interested in engaging with the country and is ready to pursue equal and mutually beneficial cooperation

Speaking at a plenary session of the 29th St. Petersburg International Economic Forum (SPIEF) in St. Petersburg, Putin said Russia is "convinced that this particular approach where partners hear one another, understand their partners' interests, and identify common solutions represents a harmonious path of development and makes it possible to respond to the serious challenges facing the modern-day world."

Russia remains "open to everyone interested in engaging with our country and is ready to pursue equal and mutually beneficial cooperation," said Putin.

He emphasized that the world can only become more equitable when economic growth is distributed more broadly, and opportunities become available to billions of people who have long remained on the periphery of the global economy.

It is of crucial importance that new centers of economic growth seek to shape their own development paths, increase their share of value creation, and build their own brands, standards, and capabilities, Putin said.

He said the global trading system is becoming less West-centric, citing the growing role of BRICS countries in world trade.

According to the Russian president, international trade is becoming more efficient through the expansion of direct supplies without unnecessary intermediaries, the development of settlements in national currencies, and the opening of new logistics routes.

Held annually since 1997, the SPIEF has grown into one of Russia's most important international economic forums.

This year's event, running from Wednesday to Saturday, has brought together about 20,000 representatives from political, business and academic circles from more than 100 countries and territories.

Putin says Russia remains open to everyone ready to pursue equal and mutually beneficial cooperation