Hong Kong stocks rose on Friday, recording their best weekly performance in 9 months, as sentiment towards Chinese internet companies improved, while mainland Chinese stocks fell as investors took profits from semiconductor stocks after a sharp rise.

The CSI 300 index of China's leading stocks ended the day down 2%, while the Shanghai Composite lost 1%. The benchmark Hang Seng Index in Hong Kong rose 0.6%.

The Hang Seng Index rose about 4% this week, recording its largest weekly gain since October 2025. The CSI 300 ended the week down 1.3%. The Hang Seng Tech Index has also risen 12% from its one-and-a-half-year low recorded in June, as investors switched from hardware stocks to stocks with low valuations.

The index rose about 5% this week. Alibaba shares rose 2%, while Tencent shares fell 2%. UBS analysts noted in a memo that 'the positive outlook for China's internet sector remains uncertain, adding that although the positive indicators in Alibaba's second-quarter report helped pull the sector out of excessive pessimism, further gains may require additional confirmation.'

The analysts explained that opportunity cost could re-emerge as a limiting factor if the AI hardware sector regains its momentum.

On the other hand, the STAR 50 index, which focuses on the tech sector, fell 5.5% in the domestic market, though it is still up 4.5% this week, outperforming South Korea's KOSPI index which fell 7.6% over the same period.

Increasing expectations of a listing by CXMT, a major memory chip manufacturer, fueled the rise in Chinese chip stocks earlier this week.

Consumer staples and healthcare stocks led the gains in the domestic market, rising 2% and 1.6% respectively. Semiconductor stocks fell 6.4%, giving back the previous day's gains. Meanwhile, satellite industry stocks jumped 5.2%, after China successfully tested an experimental system for rocket recovery using a net mounted on a sea platform.