China’s stock markets ended Friday, December 5, 2025, on a positive note, snapping a three‑day losing streak as a powerful rally in domestic chipmakers and insurers offset ongoing concerns over the country’s deep property downturn.
On the mainland, the Shanghai Composite Index climbed 0.7% to 3,902.81, while the Shenzhen Component Index advanced 1.08% to 13,147.68. Turnover on the two main boards rose to about 1.73 trillion yuan, up from 1.55 trillion yuan the previous session, signalling improving risk appetite. [1]
The large‑cap CSI 300 Index finished around 4,584.54, up roughly 0.8–0.9% on the day and about 1.3% higher for the week, according to official and market data. [2]
In Hong Kong, the Hang Seng Index (HSI) closed near 26,085, up about 0.6%, leaving it almost 0.9% higher over the week, with the Hang Seng Tech Index adding around 0.8%. [3]
The gains put Chinese and Hong Kong equities among the better performers in Asia on a day when global markets were mostly higher, with Wall Street hovering near record levels ahead of a crucial U.S. Federal Reserve meeting. [4]
China stock market today: key moves at a glance
Mainland China (A‑shares) [5]
- Shanghai Composite (SSE): 3,902.81, +0.7%
- Shenzhen Component: 13,147.68, +1.08%
- CSI 300 (large caps): 4,584.54, +0.84% (roughly +1.3% on the week)
- ChiNext (growth/tech board): 3,109.3, +1.36%
Hong Kong (offshore China) [6]
- Hang Seng Index (HSI): ~26,085, +0.6%, about +0.9% for the week
- Hang Seng Tech Index: roughly +0.8% on the day
Sector‑wise on the mainland, insurance, precious metals and commercial aerospace stocks led gains, while banking, traditional Chinese medicine and film/theatre names lagged. [7]
Chip optimism and “China’s Nvidia” power a tech‑led rebound
Today’s upturn was driven by a sharp rebound in technology and semiconductor names, underscoring how the AI and chip narrative has become central to the China equity story.
According to Reuters, mainland stocks “snapped a three‑day slide” as renewed optimism in domestic chipmakers boosted sentiment. [8] One focal point was Moore Threads, a GPU designer often described in local media as “China’s Nvidia”, which reportedly surged roughly fivefold in its trading debut in Shanghai. Investors are betting that the U.S.-sanctioned company will benefit from Beijing’s push for chip self‑sufficiency and restrictions on advanced U.S. AI chips exports. [9]
A bipartisan group of U.S. senators has introduced legislation aimed at preventing the Trump administration from easing export controls on cutting‑edge AI chips to China over the next couple of years, keeping the “tech decoupling” narrative very much alive. [10]
Patrick Pan, China equity strategist at Daiwa Capital Markets, argued in a client note that Chinese tech breakthroughs combined with “national pride” amid geopolitical tension are likely to remain a key pillar of a “slow bull market” in China equities over the next 6–12 months, and that the recent pullback has created more upside for 2026. [11]
That bullish view on tech dovetails with the macro backdrop painted by Goldman Sachs, which recently upgraded its China growth forecasts. Goldman now expects: [12]
- Real export growth: ~5–6% per year over the next few years (up from 2–3% previously)
- Real GDP growth:5.0% in 2025, 4.8% in 2026, and 4.7% in 2027
The bank argues that China’s new 15th Five‑Year Plan (2026–2030), which heavily emphasizes advanced manufacturing and high‑tech exports, is turning China into the global leader in sectors such as EVs, batteries and semiconductors—supportive of AI‑ and chip‑linked Chinese stocks even as traditional sectors lag. [13]
Property slump remains the biggest drag
Beneath today’s upbeat headline numbers, the property crisis remains the single most important structural headwind for Chinese equities.
- The CSI 300 Real Estate Index fell around 0.2% today, even as the broader CSI 300 gained nearly 1%. [14]
- A recent Reuters survey expects Chinese home prices to fall about 3.7% in 2025 and continue declining through 2026, with stabilization only projected around 2027. [15]
In a separate global markets note, Reuters described China as still “in the woods”, with a years‑long property slump and weak domestic demand showing little sign of a decisive turnaround. Upcoming trade and inflation data next week, as well as the economic agenda for 2026 to be unveiled later this month, are seen as critical for sentiment. The same note highlights China Vanke, once the country’s top homebuilder, which is seeking a one‑year extension on an onshore bond repayment, with a bondholder vote set for December 10—a test case for the sector’s credit stress. [16]
Adding to investor unease, a recent Bloomberg newsletter reported that authorities have asked two private data agencies to suspend publication of monthly home‑sales figures, which had been a key independent gauge of the housing market. That move has stoked concern about transparency just as investors try to assess how deep the downturn really is. [17]
At the same time, policy support is slowly building. A separate Morgan Stanley analysis cited by Bloomberg estimates that Beijing may need to deploy about 400 billion yuan (roughly US$57 billion) per year in mortgage subsidies to meaningfully revive housing demand and repair consumer confidence. The bank expects a gradual, flexible approach to fiscal support through 2026. [18]
In short: chip euphoria is clashing with property gloom, and today’s tape shows that while tech can pull the indexes higher, the real estate sector is still acting as a brake on any sustained bull market.
Policy and regulatory signals: insurance boost, data control and 2026 growth targets
One of the more interesting stories hiding behind the index moves is the regulatory tailwind helping certain financials.
Reuters reports that the Chinese insurance sector index jumped about 4.5%, reaching its highest level since mid‑November, after the sector’s regulator said it would lower the risk factor applied to some stock holdings in solvency calculations. This effectively reduces capital requirements and frees insurers to allocate more money into equities—supportive both for their own share prices and for the wider market. [19]
On the macro side, several major institutions have updated their China forecasts in recent days:
- BBVA Research has lifted its 2025 GDP forecast to 5.0% (in line with Beijing’s target) and kept 2026 growth at 4.5%, citing resilient industrial output but ongoing deflationary pressure and weaker‑than‑expected activity data. [20]
- Goldman Sachs, as noted above, is more upbeat, effectively assuming that Beijing targets around 5% growth on average for 2026–2030, consistent with the Five‑Year Plan’s goal of reaching “moderately developed” income levels by 2035. [21]
- According to a recent market summary, many economists expect China to maintain an “around 5%” growth target for 2026, with fiscal stimulus likely to be similar in scale to 2025, suggesting policy continuity rather than a dramatic new bazooka. [22]
Meanwhile, policymakers are still weighing additional property‑specific measures, including the previously discussed mortgage subsidies and a reported new real‑estate support package, though the details and timing remain uncertain. [23]
Hong Kong’s Hang Seng: relief rally after a bruising year
The Hang Seng’s 0.6% rise today and 0.9% gain over the week come after a roller‑coaster 2025 for Hong Kong stocks. TechStock²+1
- In April, the HSI suffered a 13.2% one‑day plunge, its steepest fall since 1997, after a major escalation in U.S.–China tariffs triggered a violent risk‑off move. China’s sovereign wealth fund, Central Huijin, stepped in to buy domestic stocks and help stabilise the market. [24]
- As recently as late November, the index ended a week down about 5%, with tech names slumping and mainland indices registering their worst weekly losses since late 2024, according to RTHK’s recap based on Reuters and Xinhua data. [25]
Today’s bounce looks modest in that context. A detailed Hong Kong‑focused wrap published earlier today notes that: TechStock²+1
- The HSI closed at 26,085.08, up about 0.6%, and
- The index is still wrestling with deepening property stress, weak factory data and bearish technical indicators, even as expectations for Fed rate cuts in 2026 provide some support to risk assets globally.
Earlier this week, a Finimize briefing described Hong Kong traders as broadly cautious, watching for both Beijing’s growth signals and U.S. monetary policy: the market has been oscillating between hopes for looser global financial conditions and fears that China’s domestic recovery will remain uneven. [26]
Strategists’ outlook: mild gains, AI‑led outperformance and lingering deflation
Despite the volatility, several major research houses now expect Chinese equities to grind higher over 2026, rather than surge or collapse.
Morgan Stanley: low‑single‑digit upside into 2026
In a mid‑November note, Morgan Stanley became the first Wall Street bank to publish a full 2026 call on China: [27]
- MSCI China Index: year‑end 2026 target of 90, implying ~3.4% upside from current levels
- Hang Seng Index: target 27,500, about 3.5% above present levels
- CSI 300 Index: target 4,840, roughly 4.6% above current levels
The bank expects Chinese corporate earnings to grow about 6% in 2026, accelerating to 10% in 2027, with valuations staying close to current multiples. It recommends a bottom‑up, stock‑picking approach, favouring:
- Tech and AI names aligned with China’s self‑reliance agenda
- High‑dividend stocks that can cushion volatility
In short, Morgan Stanley sees a continuation of the 2025 bull run, but with “marginal, low‑single‑digit” upside rather than a fresh melt‑up.
Capital Economics: tough macro, but AI could propel stocks
Capital Economics, in a December 1 update titled “Six non‑consensus calls for China for 2026,” takes a more cautious macro view. The firm expects: [28]
- Ongoing overcapacity and deflation,
- Worsening external imbalances, and
- Limited improvement in nominal growth, even if real growth slows only gradually.
However, it also argues that these challenges may not prevent a further AI‑driven rally in Chinese equities, which it believes could outperform most other markets next year, especially if global investors rotate into under‑owned Chinese tech and AI names after a period of U.S. mega‑cap dominance.
Taken together, these calls sketch a picture where macro risks remain elevated, but equity performance could still be respectable, especially in policy‑favoured sectors like semiconductors, AI, high‑end manufacturing and select consumer names.
How today’s moves fit into the bigger 2025–2026 China story
Putting all of this together, the December 5, 2025 session underscores several themes that are likely to matter well into 2026:
- Tech and AI remain the market’s engine
- Domestic chipmakers and AI‑linked names, epitomised by the explosive debut of Moore Threads, are increasingly central to the bull case for China stocks. [29]
- Property is still the Achilles’ heel
- Real‑estate stocks continue to lag, home prices are widely expected to fall further into 2026, and major developers like Vanke are negotiating bond extensions. [30]
- Policy support is targeted, not overwhelming
- Regulators are tweaking rules (e.g., insurance capital requirements) and considering measures like mortgage subsidies, but there is no sign yet of an all‑out, 2009‑style stimulus. [31]
- Macro growth is “okay, not great”
- Forecasts around 5% real growth and persistent deflationary forces mean China is unlikely to deliver a runaway boom, but also unlikely—barring shocks—to fall into an outright hard landing, according to mainstream forecasts from BBVA and Goldman Sachs. [32]
- Global context still matters a lot
- Fed policy, U.S.–China trade dynamics and AI‑related geopolitics continue to drive flows in and out of Chinese assets, as shown by April’s tariff‑driven crash and today’s chip‑led rebound. [33]
What to watch next
For investors and observers tracking China’s stock market after today’s session, key near‑term catalysts include: [34]
- Upcoming data:
- November trade figures and inflation (CPI/PPI) due next week
- Any surprises on prices or exports that might validate or challenge the 2026 growth narrative
- Property policy and credit events:
- The December 10 bondholder meeting for China Vanke
- Further details on potential mortgage subsidies or real‑estate‑focused stimulus
- High‑level policy guidance:
- The economic agenda for 2026 to be unveiled later this month, including the formal growth target and any new language on housing, employment and tech self‑reliance
- Global central bank moves:
- The December U.S. Federal Reserve meeting, where markets broadly expect another rate cut, and how that shapes capital flows into emerging markets and high‑beta assets such as Chinese tech stocks
Bottom line
China’s stock market today looks like a tug‑of‑war:
- On one side are AI, chips and policy‑favoured sectors that continue to attract both domestic and foreign money.
- On the other side are property, weak domestic demand and lingering deflation, which keep many investors underweight China despite attractive valuations.
Friday’s session, with Shanghai, Shenzhen and Hong Kong all closing higher, suggests that for now, optimism in tech and targeted policy easing is ahead on points—but not by a knockout. The balance between those forces will determine whether 2026 ends up as another year of slow‑burn recovery or a return to crisis‑driven volatility for Chinese equities.
This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
References
1. english.news.cn, 2. www.investing.com, 3. www.investing.com, 4. www.washingtonpost.com, 5. english.news.cn, 6. www.investing.com, 7. english.news.cn, 8. www.tradingview.com, 9. www.tradingview.com, 10. www.tradingview.com, 11. www.tradingview.com, 12. www.goldmansachs.com, 13. www.goldmansachs.com, 14. www.tradingview.com, 15. www.tradingview.com, 16. www.reuters.com, 17. www.bloomberg.com, 18. www.bloomberg.com, 19. www.tradingview.com, 20. www.bbvaresearch.com, 21. www.goldmansachs.com, 22. tradingeconomics.com, 23. www.bloomberg.com, 24. www.reuters.com, 25. gbcode.rthk.hk, 26. finimize.com, 27. www.scmp.com, 28. www.capitaleconomics.com, 29. www.tradingview.com, 30. www.tradingview.com, 31. www.tradingview.com, 32. www.bbvaresearch.com, 33. www.reuters.com, 34. www.reuters.com
