China's blue-chip stocks hit over one-year low on AI-linked supply chain selloff
SHANGHAI: China’s blue-chip stock index fell to its lowest in more than a year on Friday, as a selloff in AI-related supply chain shares deepened, while Hong Kong stocks rebounded on gains in internet companies. The CSI300 Index dropped 1.3% by the lunch break to its lowest level since August 2025, while the Shanghai Composite Index lost 1.2%. Hong Kong’s benchmark Hang Seng was up 1.1%. The 5G…
China’s blue-chip stock index sank to its lowest level in over a year on Friday, as a sharp decline in AI-related supply chain shares intensified, while Hong Kong’s stock market rebounded with internet companies leading the gains. The CSI300 Index tumbled 1.3% by lunchtime, reaching its lowest point since August 2025, while the Shanghai Composite Index dropped 1.2%.
Hong Kong’s Hang Seng Index, however, surged 1.1%. The 5G Communication Index plummeted as much as 6%, hitting a two-month low. Tech-focused STAR50 Index also slid nearly 4%, reaching a five-month low. Zhongji Innolight, a key producer of optical transceivers for AI data centers, fell 5.4%, and memory chip leader CXMT declined nearly 5%.
The country’s stock benchmarks are hovering near the levels observed two years ago when a Beijing stimulus surge lifted prices and reignited optimism for a sluggish bull market, now languishing in a three-month downturn. Conversely, the Coal Index climbed 1.4%, and consumer staples shares rose 0.6%, as investors shifted towards more stable and traditional sectors to mitigate risk.
Hong Kong tech shares bounced back, climbing 1.6%, but the index remained close to a two-year low. The People’s Bank of China defended its exchange-rate policy against foreign criticism on Thursday, stating it has never intentionally pursued competitive depreciation, amid European calls for a stronger yuan to alleviate China’s record trade surplus and export boom.
A stronger yuan could pose a more persistent earnings headwind for Chinese corporations with substantial overseas revenue, many of which are under-hedged, analysts from UBS noted.
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