China stocks slip, set for 12th straight weekly loss on AI-led selloff

SHANGHAI: China’s blue-chip shares edged lower on Friday and were headed for a 12th consecutive weekly loss, as a global selloff in AI stocks weighed on sentiment, though Hong Kong-listed internet companies bucked the trend.

China’s blue-chip CSI300 Index dropped 0.4% to a one-year low by the lunch break, while the Shanghai Composite Index lost 0.3%. Hong Kong benchmark Hang Seng was up 1.6%.

The CSI300 Index was down 0.9% for the week and 7.6% for the month, and on track for its biggest monthly loss since July.

Over the last 12 weeks, it has lost 14%, the longest losing streak on record.

The Hang Seng Index was up 1.1% this week. AI-related shares led declines onshore following overnight declines in New York and along with their Asian peers.

Shares in Google parent Alphabet, Amazon and Intel all fell on AI cash burn.

Memory chip giant SK Hynix fell more than 7%.

Shanghai’s tech-focused STAR50 index fell 1.8%. CSI 5G communications, a gauge that measures the industry, plunged as much as 6% in early trade.

Shares of Chinese optical module producer Eoptolink Tech tumbled nearly 8% and were down 46% this month. Against broad declines, consumer staple shares rose 1%.

Tech majors listed in Hong Kong rebounded, up 1.4%, although the gauge still hovers near its lowest level in two years.

“At valuations of 10-11 times price-to-earnings after accounting for new AI investment, we think some stocks are increasingly treating the spending peak as a permanent earnings burden, while assigning limited value to a normalisation of future cash flows or successful AI monetisation,” said Kenneth Fong, head of China internet research at UBS. Mainland property developers in Hong Kong rose 2.7%.