SHANGHAI: China stocks fell on Friday but were set for a weekly gain, as onshore investors rebuilt positions after the holiday on hopes the upcoming National People’s Congress will back technology and innovation. Hong Kong shares rebounded on a tech-driven boost. China’s blue-chip CSI300 Index was down 0.7% by the lunch break, while the Shanghai Composite Index edged 0.2% lower. Hong Kong’s benchmark Hang Seng Index climbed 0.8%. The CSI300 Index was on track to end the holiday-shortened week 0.7% higher, while the Hang Seng Index has climbed 0.6% so far this week. Onshore sentiment has improved as investors rebuilt equity positions post-holiday, state-linked funds paused heavy selling, and expectations grew that the upcoming National People’s Congress will unveil policies supporting technology, innovation and domestic consumption, analysts at Morgan Stanley said in a note. The closely watched annual parliamentary meeting will begin on March 5, state media reported in late December. Hong Kong-listed tech majors rebounded 1% after three consecutive sessions of losses, although the sector is on track to finish the week 1% lower. The recent pullback in the Hang Seng Tech Index suggests some investment flows may be shifting toward consumer stocks, UBS analysts said, noting that sentiment remains positive on low valuations, reflation trades, and early strength in sectors such as baijiu (China’s strong distilled liquor), dairy, and other staples. Onshore consumer staple shares rose 0.5%. China’s yuan halted a long rally on Friday after authorities made their strongest pushback yet against its gains by cutting the cost of buying dollar forwards. A weaker yuan could help money flow to Hong Kong market via the Stock Connect scheme. Shares of onshore semiconductor material and equipment companies fell nearly 3%, following an overnight drop in US-based AI darling Nvidia. The CSI Coal Index climbed 2%. The US International Trade Commission said on Thursday it would investigate the economic impact of revoking China’s permanent normal trade status over a six-year period, a move that would likely increase tariffs on Chinese imports.