China’s bear-market rout deepens as growth concerns and AI sell-off spur caution

Chinese stocks continued their downward spiral on Friday, sending the key CSI 300 index into bear-market territory as doubts surrounding potential stimulus measures and a shift away from artificial intelligence investments weighed on investor confidence. The CSI 300 declined by 1.7%, closing at 3,964.48, marking its lowest level since July 2025.

The benchmark had already entered bear-market territory the previous day after falling 20% from its June peak. The technology sector suffered the most significant losses, with the Star Market 50 index, which tracks major chip manufacturers such as Semiconductor Manufacturing International Corp and Cambricon Technologies, dropping 3.6%.

The ChiNext 50, which includes producers of optical transceivers used in AI data centers, experienced a 3.1% decline. Leading global investment banks, including UBS Group and Nomura Holdings, expressed concerns this week that Beijing's chances of implementing more robust growth initiatives within the year had dwindled following third-quarter data revealing China was on track to achieve its annual growth target.

This uncertainty added to the broader risk-off sentiment in global markets, as the Nasdaq 100 index slipped 2% on Thursday following Meta Platforms' announcement of an extensive capital expenditure plan, sparking worries about the long-term viability of AI investments.