HONG KONG: China and Hong Kong stocks fell on Friday as a Nasdaq-led tech rout rippled across Asia and fuelled fears the AI boom is losing steam, although bargain hunting helped pare losses in mainland markets buoyed by Beijing’s market-supporting measures.
China’s blue-chip CSI 300 Index dropped 1.4 percent, but notched up a 1.7 percent gain for the week to snap a 12-week-long losing streak.
The Shanghai Composite Index fell 1.1 percent on Friday, though it ended the week 1.4 percent higher, breaking a six-week run of declines.
In Hong Kong, the benchmark Hang Seng Index was down 1.3 percent but registered a 5.1 percent weekly gain, its best since March 2025. The Hang Seng Tech Index slid 1.8 percent on Friday, but posted its best weekly gain since February 2025, advancing 8.6 percent.
Tech sectors across Asia took a heavy blow after a steep selloff overnight in the US wiped trillions of dollars off market value, as investors fretted that a Democratic sweep in the US midterm elections could bring tighter scrutiny of the AI sector.
China’s tech-focused Star 50 Index and the AI Index slumped as much as 5.2 percent before paring some losses.
Dong Baozhen, chairman of asset manager Lingtong Shengtai, said the overnight slump in US tech stocks meant the logic behind the AI-driven rally had crumbled.
“The US stock market has been the standard-bearer and backbone of the global AI bull run. Now that backbone has snapped. Can AI bull markets elsewhere hold up on their own?” he said.
Chinese AI hardware stocks with significant exposure to the US market were among the hardest hit. Zhongji Innolight, which makes optical transceivers for data centres and generates most of its revenue in America, slumped 9.2 percent to a one-year low. Rival Eoptolink Technology tanked 7.3 percent.
Jason Hsu, founder and chairman of Rayliant Global Advisors, said China’s sentiment-driven stock market was heavily influenced by AI stock performance in the United States.
Technology stocks carry significant weight in China’s stock market and “what people are really watching closely is whether AI in the United States is a bubble,” he said, adding that any signs of a bubble bursting in the US “obviously will affect the Chinese market.”
Still, early panic selling drew in bargain hunters, helping trim losses after Beijing rolled out support measures and reiterated its commitment to preventing systemic risks.
“The series of domestic support measures introduced recently should provide a degree of support within a trading range and help reduce the risk of a systemic downturn,” said Ailsa Liao, senior analyst at Forthright Securities.
Some analysts, however, cautioned that the measures might not be enough to insulate the market from external shocks.
“I don’t think China can completely escape the fallout from Wall Street, especially with selling this aggressive,” said Pepperstone strategist Dilin Wu.
“But I’d be careful about treating China’s entire AI supply chain as one trade,” she said, adding growth in AI chip players like Huawei and Cambricon is mainly driven by China’s push for technological self-reliance.
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