China stocks snap three-day slide on domestic chip optimism

China stocks edged higher on Friday, snapping a three-day losing streak and reversing earlier losses in the week, as renewed optimism on domestic chipmakers boosted sentiment.

** The Shanghai Composite Index 000001 closed up 0.7% to 3,902.81, marking its first daily gain after three consecutive declines and bringing the week's advance to 0.4%.

** The blue-chip CSI 300 Index 3399300 added 0.8% and has gained 1.3% this week.

** In Hong Kong, the benchmark Hang Seng Index HSI climbed 0.6% and has gained 0.9% for the week. The tech index HHSTECH added 0.8%.

** In focus on Friday, Moore Threads (688795.SS) - often called "China's Nvidia" - surged roughly fivefold in its trading debut as investors bet the U.S.-sanctioned firm will gain from Beijing's push to strengthen domestic chip production.

** Its explosive debut followed news that a bipartisan group of U.S. senators introduced a bill on Thursday aiming to prevent the Trump administration from easing restrictions on China's access to advanced AI chips from Nvidia NVDA and AMD AMD for the next 2.5 years.

** China's tech breakthroughs, as well as "national pride", amid geopolitical tensions, are set to continue being a main pillar for the slow bull market for the next 6-12 months, said Patrick Pan, China equity strategist at Daiwa Capital Markets in Hong Kong.

** "From a longer-term perspective, we believe the recent pullback of China equities should have freed up more upside for the next year," he said in a note.

** Also lifting the market on Friday was the insurance sector (.CSI399809), which rallied 4.5% to the highest level since Nov 14, after the sector's regulator said it will lower the risk factor for insurers holding certain stocks, a move that could reduce capital requirements and free up more funds for investment.

** The CSI 300 Real Estate Index 000952 was down 0.2%, continuing the recent slide. China's home prices are forecast to decline 3.7% this year, and are likely to fall through 2026 before stabilising in 2027, according to the latest Reuters survey.