Chinese stocks log biggest weekly loss since December as tech drags

The Shanghai Composite Index dipped 2.5% at market close, the biggest single-day decline since April 7. (EPA Images pic)

HONG KONG: China stocks tumbled on Friday and posted their biggest weekly decline since late December, joining a global market selloff with tech shares leading declines.

The Shanghai Composite Index dipped 2.5% at market close, the biggest single-day decline since April 7. That brought the week’s loss to 3.9%, the worst since Dec 30, 2024.

The blue-chip CSI 300 Index declined 2.4% and posted a weekly loss of 3.8%, also the worst in nearly a year.

Declines were broad-based, with tech shares leading the slide following their US counterparts’ weak session on Wall Street overnight. The CSI AI Index lost 4.2% and the CSI Semiconductor Index declined 4.3%.

Defensive plays also posted losses, with the banking sector slipping 1%, liquor down 1.1% and consumer staples declining 0.8%.

“The move looks more like risk-off sentiment in recent overheated outperforming sectors,” analysts at Goldman Sachs said, adding that some money might start to seek shelter in some of this year’s underperforming sectors.

In Hong Kong, the benchmark Hang Seng Index slid 2.4% to a five-week low. It’s down 5% for the week, the biggest loss since April 7.

The Hang Seng tech index declined 3.2%, the sixth straight losing session to its lowest since August.

“Market sentiment weakened toward year-end on lower risk appetite and recent muted economic data,” analysts at Morgan Stanley said.

Index upside is modest with moderate earnings growth and valuation settling at a higher regime, they added.

The next policy window to watch for markets will be after the Central Economic Work Conference (CEWC) in mid-December, analysts at Citi said.

However, despite the weakness in China shares, UBS said investors don’t appear to worry too much that the US selloff may not impact flows into Asia and China markets immediately.

“If the liquidity-driven US selloff persists long enough to deflate the AI bubble healthily, it could benefit emerging markets, particularly China.”