SHANGHAI: China’s blue-chip shares closed lower on Friday and booked their steepest monthly loss since early 2016, as a global selloff in AI stocks weighed on sentiment.
China’s blue-chip CSI300 Index fell 1.4 percent to close near a one-year low, while the Shanghai Composite Index shed 1.4 percent. Hong Kong’s benchmark Hang Seng was up 1.5 percent.
The CSI300 Index was down 8.5 percent for the month, its biggest monthly loss in more than a decade. Over the last 12 weeks, it has lost 15 percent, the longest losing streak on record.
The Hang Seng Index was up 0.9 percent this week.
AI-related shares led declines onshore after a selloff in US technology stocks reignited concerns about the returns on heavy AI spending. Shares in Google parent Alphabet, Amazon.com and Intel all fell on AI cash burn. Memory chip giant SK Hynix fell more than 7 percent.
Shanghai’s tech-focused STAR50 index fell 5.5 percent.
CSI 5G communications, a gauge that measures the industry, slumped 6.2 percent. Shares of Chinese optical module producer Eoptolink Tech tumbled 14 percent and were down 50 percent this month.
Against broad declines, consumer staple shares rose 2 percent as investors rotated into less risky sectors.
Tech majors listed in Hong Kong rebounded 0.3 percent, although the gauge still hovered near its lowest 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.
In Hong Kong, financials led gains, up 1.3 percent, while mainland property developers rose 2.8 percent.