China stocks head for biggest weekly loss since December as tech drags

China stocks tumbled on Friday and were heading toward their biggest weekly decline since late December, as technology shares joined a global sell-off. ** The Shanghai Composite Index dipped as much as 2.3% to the lowest since October 17 before narrowing the loss to 1.9% as of the midday trading break.

China stocks tumbled on Friday and were heading toward their biggest weekly decline since late December, as technology shares joined a global sell-off.

** The Shanghai Composite Index dipped as much as 2.3% to the lowest since October 17 before narrowing the loss to 1.9% as of the midday trading break. The blue-chip CSI 300 Index was also 1.9% lower. ** Both gauges are now down roughly 3.3% for the week, the worst performance since December 30, 2024, if sustained.

** Declines were broad-based, with tech shares leading the slide, following their U.S. counterparts' weak session on Wall Street overnight. The CSI AI Index lost 3.5% and the CSI Semiconductor Index declined 3.1%. ** Defensive plays also posted losses, with the banking sector slipping 1%, liquor down 0.8% and consumer staples declining 0.5%.

** In Hong Kong, the benchmark Hang Seng Index slid 2.1% to a five-week low, and the tech index tumbled 3.1% to a three-month low. ** "Market sentiment weakened toward year-end on lower risk appetite and recent muted economic data," analysts at Morgan Stanley said in a note.

** 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 U.S. selloff may not impact flows into Asia and China markets immediately. ** "If the liquidity-driven U.S. selloff persists long enough to deflate the AI bubble healthily, it could benefit emerging markets, particularly China."