China Stocks Slide as CATL Plunges 10%, Shanghai Composite Falls 0.6% on Weak Consumer Demand Worries

SHANGHAI — Chinese stocks fell Wednesday as a sharp drop in battery giant CATL and growing worries about weak consumer demand outweighed a broader recovery in Asian markets.

The benchmark Shanghai Composite Index fell 22.34 points, or 0.60%, to close at 3,713.03. The Shenzhen Component Index lost 0.82%, and the blue-chip CSI 300 Index was down 0.7% by the midday break.

The index opened at 3,740.57, briefly reached 3,743.08 and then drifted lower through the day. It touched a low of 3,703.12 in afternoon trading. Turnover on the Shanghai index was about 37.8 billion shares, below Tuesday's level, which suggests investors were reluctant to make big bets ahead of more third-quarter earnings.

CATL leads the decline

The biggest drag was Contemporary Amperex Technology Co., the world's largest maker of electric vehicle batteries. Its shares fell 10% in both Shanghai-listed Shenzhen trading and Hong Kong after the company reported much slower profit growth for the third quarter. The company cited fierce competition and slower growth in Chinese auto sales.

Because CATL is one of the most heavily weighted stocks in mainland indexes, its drop pulled down the broader market and the new energy sector as a whole. Liquor makers were also among the worst performers. Big data and cloud computing companies held up better.

Market participants said investors were using consumer stocks to express doubts about China's domestic economy before more quarterly earnings arrive. Toymaker Pop Mart fell about 4% in Hong Kong trading by midday on expectations that its third-quarter results would disappoint, adding to the cautious mood.

Strong growth reduces stimulus hopes

The selloff came two days after data showed China's economy grew 4.5% in the third quarter from a year earlier. That was faster than forecast and a rebound from a three-year low in the previous quarter. Strong exports drove the gain while domestic demand stayed soft.

On Tuesday, the People's Bank of China left its benchmark loan prime rates unchanged. Many investors now believe Beijing is unlikely to announce new market-boosting measures soon, since the headline growth numbers remain solid.

Sophie Altermatt, an economist at Julius Baer, said in a note that instead of trying to lift short-term growth, Beijing's priority remains "technological advancement, industrial upgrading and greater self-sufficiency."

That expectation has weighed on sentiment. Investors had hoped weaker growth would push policymakers toward more support for consumers and the property market.

A difficult October

Wednesday's decline adds to a rough month for mainland shares. The Shanghai Composite finished September at 3,842.19, before the weeklong National Day holiday. It is down more than 3% since then and more than 5% over the past month.

The sharpest drop came on Oct. 15, when the index fell 1.6% to 3,707.48. U.S. consumer prices rose 3.7% in September, above forecasts, which revived fears of higher interest rates and triggered a selloff in technology stocks across Asia. Concerns about possible new trade measures from the European Union against Chinese exports added to the pressure. On that day the index reached its lowest level since July 2025, and its intraday low of 3,674.82 remains the bottom of its 52-week range.

The index then gained for three straight sessions, helped by the stronger-than-expected GDP report. Wednesday's loss erased most of that recovery.

The Shanghai Composite now trades well below its 52-week high of 4,258.86. It is also far from levels reached about two years ago, when a burst of stimulus from Beijing sent Chinese stocks sharply higher.

AI supply chain under pressure

Chinese technology stocks, especially companies that supply hardware for artificial intelligence, have been volatile this month. Optical transceiver makers and chip-related shares were hit hard during last week's selloff as investors questioned whether heavy spending on AI infrastructure would pay off.

Across Asia on Wednesday, chipmakers recovered some of those losses after strong results from AI beneficiaries in the United States, including SpaceX and Super Micro Computer. Mainland Chinese stocks did not join the broader rally.

Analysts trim targets

Some brokerages have lowered their expectations for Chinese stocks. Last week, HSBC cut its year-end targets for the Shanghai Composite, CSI 300 and Shenzhen Composite by 9% to 15%. Its new target for the Shanghai Composite is 4,100, which still implies some upside from current levels.

What investors are watching

Third-quarter earnings season will be the main focus in coming weeks, especially from consumer-facing companies, as investors look for signs of how much household spending is recovering. Trade relations with the European Union and the United States also remain a concern for exporters, which have driven much of China's growth this year.

Global factors could also matter. U.S. technology giants including Meta Platforms and Tesla are scheduled to report results this week. Those reports could set the tone for AI-related shares across Asia, including in China.

For now, analysts say the market is caught between better-than-expected growth figures and the reduced likelihood of new stimulus, a combination that has left Chinese stocks without clear direction.