HONG KONG: China and Hong Kong stocks tumbled on Friday after a sharp drop in gold prices sparked a broad-based selloff across the markets, while state media warned against speculative trading.
The Shanghai Composite Index closed 1 percent lower at 4,117.95, after losing as much as 2.2 percent earlier in the day.
Despite the drop, the Shanghai benchmark has gained 3.8 percent in January, its best monthly gain since August.
The blue-chip CSI 300 Index closed down 1 percent, and registered a 1.7 percent gain for the month.
Losses were spread across the board on Friday, with gold-related shares seeing the biggest selloff after a sudden retreat in bullion prices from record highs.
Sentiment was further dented after the state-owned Securities Times warned against the rally, while regulators including the Shanghai Gold Exchange announced news measures such as raising margin requirements to curb speculation.
“The regulatory authorities’ timely intervention is aimed at preventing potential risks from an overheated market,” the newspaper wrote. “For ordinary investors, it’s better to view it rationally rather than blindly chasing higher prices.”
The CSI SSH Gold Equity Index tumbled 8.8 percent, and the CSI SWS non-ferrous metal index lost roughly 8.2 percent.
Miner Chifeng Gold, Shandong Gold and Zhongji Gold all plunged by their daily trading limit of 10 percent.
Among other losers, the rare earth index lost 5.7 percent and the liquor distillers weakened 4 percent.
The property sector weakened 3.4 percent, paring the sharp rally on Thursday after China reportedly dropped the borrowing limits on developers known as its “three red lines” policy.
In Hong Kong, the benchmark Hang Seng Index slid 2.1 percent to 27,387.11, and the Hang Seng Tech Index also weakened 2.1 percent.
The Hang Seng Materials index tumbled 9.1 percent, the biggest single-day gain since April 2025. Shares of Zijin Mining dropped 9.2 percent.
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