China’s stocks slip as tech weakness overshadows Fed rate decision
The US Federal Reserve held interest rates steady, as expected, delaying any changes to borrowing costs until after next week's US midterm elections.
China's Shanghai Composite Index experienced a decline of 0.9% at midday on Thursday, as a surge in tech stock sell-offs overshadowed the Federal Reserve's decision to maintain interest rates. The benchmark Shanghai Composite index dropped 0.9% to 3,008.41, while the blue-chip CSI300 index fell 1.2% to 7,531.95. The tech-heavy ChiNext Composite index saw a significant drop of 3.6%, and the tech-focused STAR50 index plummeted by 4.2%.
The CSI 5G communications index, which tracks the industry, plummeted 6.1% in early trading. Tech company Yushu Technology, or Unitree, saw its third-quarter net profit decline, despite a 70% increase in revenue, compared to the same period last year. James Wang, head of China strategy at UBS Investment Bank Research, warned that valuations for tech AI hardware stocks have hit near-historic lows, suggesting a potential slowdown in earnings per share growth.
Wang expressed caution about investor sentiment towards AI, but maintained that the risk-reward ratio may improve as the year progresses, potentially driving interest back towards the latter part of the year.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
