Chinese Stocks Decline Amid Global Tech Selloff and Falling Metals Prices

Beijing | EcoPulse24

Chinese markets retreated on Thursday, weighed down by a global tech selloff and falling metals prices. The Shanghai Composite Index dropped 0.9% to below 4,070 points, while the Shenzhen Composite fell 1.4% to 13,955, ending a two-day rebound.

The tech sector bore the brunt of the decline, as investors shied away from high-valuation stocks amid concerns over overinvestment in AI projects and potential disruption to traditional business models. Notable losers included Eoptolink Technology (-3.5%), BlueFocus Intelligent (-4.8%), Suzhou TFC Optical (-7.6%), Leo Group (-4.3%), and Cambricon Technologies (-2.6%).

Resource-related stocks also sold off as precious metals prices weakened. Zijin Mining dropped 5.2%, Hunan Gold Corp fell 9.9%, and CMOC Group declined 6.3%. The clean energy sector was hit as well, with Goldwind Science down 7.9%, Contemporary Amperex off 2%, and Sungrow Power losing 4.8%.

In Hong Kong, the Hang Seng Index continued to drop in morning trade, down about 336 points or 1.3% to around 26,510, reversing limited gains from the previous session. The decline was broad-based, with tech, financial, and consumer stocks all under pressure.

Sentiment was further dampened by Wall Street's overnight losses - driven by continued tech stock selling and weaker-than-expected U.S. January employment data - along with the mainland's market declines, reviving concerns over the pace of China's economic recovery amid ongoing weakness in manufacturing and construction.

Mining stocks led early losses in Hong Kong: China Gold International dropped 4.7%, Zijin Mining 4.1%, and Zhaojin Mining 1.6%. SMIC fell 3.5%, China Hongqiao 3.4%, and Tencent Holdings 2.2%. Baidu edged down 0.7%, despite its announcement of its first-ever cash dividend and a share buyback program.

EcoPulse24 Analysis: The simultaneous declines in Chinese and Hong Kong equities highlight Asian markets' sensitivity to global tech corrections, especially amid debates over the short-term payoff of heavy AI investment. Falling metals prices have added pressure to resource-linked stocks, narrowing market support. With signs of domestic economic slowdown and tight global financial conditions, volatility is likely to remain elevated until there is greater clarity on industrial demand and supportive policy measures.