HONG KONG: China stocks ended lower on Thursday, reversing intraday gains that spurred the benchmark to a 10-year high, as investors booked profits from the sharp rally and the US rate cut optimism bets.
Shanghai Composite index was down 1.15 percent at 3,831.66, after earlier hitting 3,899.96, its highest level since August 2015.
Blue-chip CSI300 index was down 1.16 percent.
Following the Federal Reserve’s 25-basis-point rate cut, China’s central bank left a key rate unchanged on Thursday, as authorities appear in no rush to ease monetary settings.
China’s benchmarks may face short-term pressure, as the market had been trading on US rate cut expectations, which are now priced in, Nanhua Futures said in a note.
Real estate and brokers led the losses, each down more than 3 percent.
Semiconductor firms and AI-related stocks pared gains but ended up 3.4 percent and 0.5 percent, respectively.
A report that local tech giants were banned from buying Nvidia chips, as well as Huawei’s plan to launch the world’s most powerful computing clusters further lifted sentiment.
In Hong Kong, benchmark Hang Seng index ended down 1.35 percent after it surpassed the 27,000 mark for the first time since July 2021 in early trade.
Hong Kong’s central bank lowered its base rate charged via overnight discount window by 25 bps to 4.50 percent, tracking the Fed move.
Analysts remain bullish on China stocks despite concerns of a potential bubble.
“China equities (will likely) be supported by reflation-linked policy easing, AI self-sufficiency initiatives, and continued liquidity support from authorities,” said Ray Sharma-Ong, deputy global head of multi-asset bespoke solutions, Aberdeen Investments.