HONG KONG: China stocks gave up earlier gains and tumbled in afternoon trading on Thursday, with the semiconductor sector leading losses as profit-taking pressure piled up.
China’s blue-chip CSI 300 index was down 1.4 percent at market close, after rising as much as 1.8 percent earlier in the session.
Shanghai Composite Index tumbled more than 2 percent, falling below the 4,100-point level in its biggest single-day drop since March 23.
Tech sectors led the declines, with the tech-focused STAR 50 Index losing 3.7 percent after hitting a fresh record high in the opening hours. The CSI Semiconductor Index closed down 4.4 percent and the CSI AI Index lost 3.7 percent.
Indexes tracking mid-caps and small-caps were down 3.4 and 3.5 percent, respectively.
“AI and chip stocks, having outperformed earlier, are now facing the steepest corrections amid profit-taking,” said Kenny Ng, securities strategist at Everbright Securities International.
The correction could continue in the near term, compounded by disappointing macroeconomic data released earlier in the week, he said, adding the Shanghai stock benchmark could test the 4,000-point level.
In Hong Kong, the benchmark Hang Seng Index was down 1 percent, and the Hang Seng Tech Index lost 2.2 percent.
Geopolitical uncertainties also weighed on sentiment. US President Donald Trump said on Wednesday that negotiations with Iran were in the final stage, suggesting he was prepared to wait a few days to “get the right answers” from Tehran. But Trump also warned of renewed attacks if Iran did not agree to a deal.
“From a broad market perspective, we remain positive and optimistic,” said Xiaoning Zhang, China equity strategist at J.P. Morgan, forecasting a year-end target of 5,200 for the CSI 300 Index in the base case.
“Against a backdrop of ample liquidity and broadly improving earnings, our strategy is to focus on high-quality growth and selective stock-picking,” she added.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 2.4 percent while Japan’s Nikkei index was up 3.1 percent.
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