HONG KONG: Chinese stocks snapped a three-day advance while Hong Kong stocks dropped on Thursday, dragged down by market caution as investors assessed the potential fallout from a scandal involving US chipmaker Nvidia’s chief executive.
China’s blue-chip CSI 300 Index closed down 0.8 percent and the Shanghai Composite Index fell 0.7 percent.
Hong Kong’s benchmark Hang Seng declined 1.3 percent, while the Hang Seng Tech dropped 2.4 percent.
Investors worry Nvidia CEO Jensen Huang’s scandal could weigh on the business outlook of the US chip giant’s clients.
Hang Seng Index heavyweight Alibaba Group tumbled 7 percent, logging its biggest daily loss since August, as concerns mounted that cloud operators’ access to advanced chips could face tighter US restrictions.
“Tighter US chip restrictions could accelerate domestic semiconductor substitution while making it harder for Chinese cloud companies to access advanced computing technology,” Charu Chanana, chief investment strategist at Saxo, said in a note.
Large language model startups Z.AI and Minimax lost 9 percent and 8 percent respectively.
In contrast, shares in A-share listed chip suppliers surged on Thursday, as the Nvidia crisis boosted expectations for domestic substitution.
Moore Threads, MetaX and Cambricon all jumped more than 8 percent.
Outside of tech, gold, game and robotics shares led declines.
In Hong Kong, conglomerate CK Hutchison lost 4 percent after it reportedly paused a planned dual listing of retailer AS Watson Group.
Larry Hu, Macquarie Group’s chief China economist, said Chinese equities’ performance has been “disappointing” so far this year, largely due to the lack of stimulus policy to support domestic demand.
Going into 2027, the strength of exports “will determine how much domestic stimulus Beijing will provide to meet the GDP growth target” and then drive the performance of Chinese equities, he said in a note.