China stocks head for weekly loss as AI rally loses steam

SHANGHAI: China stocks rose on Friday but were on track to end the week lower, as a rally in AI shares lost momentum and concerns over higher US yields weighed on global equities. China’s blue-chip CSI300 Index and the Shanghai Composite Index were both up 0.4% by the lunch break. Hong Kong benchmark Hang Seng rose 2.1%. For the week, the CSI300 Index was set to close nearly 1% down, while the Hang Seng Index was up 0.6%. Consumer staples shares rose 2.6%, leading gains onshore, as sentiment towards AI supply chain stocks cooled and investors shifted into traditional sectors, according to market participants. Chinese liquor giant Kweichow Moutai shares rose 2.4%. The tech-focused STAR50 Index fell 0.7%, and was down nearly 4% this week. The CSI Artificial Intelligence Index edged down 0.2%. Onshore A-share sentiment remained soft this week amid higher US yield concerns and weak domestic macro data, Morgan Stanley analysts said in a note. They lowered their China equity index targets to reflect a weaker growth outlook, tighter liquidity, less favourable flow dynamics and rising regulatory uncertainty. Hong Kong shares rose after Federal Reserve Governor Christopher Waller said he is