China Stocks Stumble as AI-Related Shares Plummet

China's stock market faced significant losses, with AI-related shares plunging severely. The blue-chip CSI300 Index fell by 3%, and Hong Kong's Hang Seng reached a new one-year low, driven by profit-taking in AI and chip sectors globally. The decline marked the largest weekly loss since April 2025.

China's stock market took a hit on Friday, with its AI-related shares suffering significant declines. The CSI300 Index, regarded as a blue-chip gauge, fell 3%, while the Shanghai Composite Index declined by 2.3%. Hong Kong's Hang Seng closed 1.8% lower, touching a fresh one-year low.

This market downfall was in part due to a global trend, following a massive drop of up to 9% in South Korea's KOSPI and an overnight decline in the Nasdaq. Investors around the world capitalized on their gains from the recent bullish surge in AI supply chain and chip stocks, precipitating this widespread tumble.

The week's figures were grim: the CSI300 Index recorded a 1.5% slide, and the Hang Seng Index experienced a 5.2% drop - its steepest weekly fall since April 2025. Notably, indices focusing on AI and communication technologies, like China's CSI Artificial Intelligence and CSI 5G, declined 4.6% and 5.8%, respectively. Market leader Zhongji Innolight also saw a 5.3% drop.