HONG KONG: China stocks fell on Thursday, while Hong Kong shares edged up, as a sharp selloff in semiconductor and optical transceiver sectors weighed on the broader market.
At the close, China’s blue-chip CSI300 Index was down 1.1 percent, while the Shanghai Composite Index dipped 0.6 percent
Hong Kong’s benchmark Hang Seng ended 0.2 percent higher, while the Hang Seng Tech index declined 1.3 percent. The panic selling in AI-related stocks globally, with the tech-heavy Kospi index tumbling in South Korea, has rocked markets and pushed investors to reassess the valuation of China semiconductor stocks, market participants said.
China’s telecommunications services sector, which contains the leading optical transceiver names including Eoptolink Technology and Zhongji Innolight, tumbled 7.6 percent. Sub-indexes that track semiconductor and AI stocks also dropped more than 6 percent each.
Zhongji Innolight shares recovered some early losses but still closed down 2 percent in their Hong Kong trading debut on Thursday after the data-centre optical parts maker raised HKD53.4 billion (USD6.8 billion) in the city’s biggest share sale this year.
Meanwhile, liquor, auto, consumer staples and bank stocks advanced, showing investors’ rotation into defensive sectors.
“I see the move as a global semiconductor de-risking rather than a China-specific sell-off,” said Jeff Ko, chief analyst at CoinEx.
CXMT’s listing likely amplified the move by triggering a rotation from indirect semiconductor plays into a more direct proxy for China’s domestic memory-chip theme, he added.
Smaller tech-heavy indexes posted larger losses.
The start-up board ChiNext Composite index was weaker by 4 percent and Shanghai’s tech-focused STAR50 index was down 5.4 percent.
“With trading and valuation risks being rapidly priced out, we believe the main phase of the correction has likely run its course. The market is expected to transition into a range-bound period,” analysts at China Asset Management said in a note.
On the policy front, China pledged on Thursday to accelerate spending plans and adopt “incremental policies” that boost economic growth in the second half, according to a statement released after this week’s Politburo meeting.
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