Shanghai Composite Falls 1.1% as Global AI Rout Hits China Tech, but Beijing Support Limits Mainland Losses

SHANGHAI — Chinese stocks fell on Friday as a global selloff in artificial intelligence shares rippled across Asia, though mainland markets held up far better than the region's chip-heavy exchanges.

The Shanghai Composite Index fell 40.73 points, or 1.10%, to 3,649.18.

The decline was mild compared with neighboring markets. Analysts noted the milder Hong Kong and Shanghai moves contrasted with the much steeper losses in chip shares and Japanese semiconductor indexes.

Beijing's support

Bargain hunting helped cushion the fall. China and Hong Kong stocks fell as a Nasdaq-led tech rout fueled fears the AI boom is losing steam, although bargain hunting helped pare losses in mainland markets buoyed by Beijing's market-supporting measures.

Tech stocks hit

The selling was most intense in technology shares. Both the tech-focused Star 50 Index and the AI Index slumped as much as 5% before recouping some losses.

China's blue-chip CSI300 Index declined 1.5% by the midday break, although it remained on track to end a 12-week losing streak.

Hong Kong's AI stocks also suffered. The Hang Seng Index was down 1%, while the Hang Seng Artificial Intelligence Index tumbled 4%.

Rally reverses

Friday's decline followed a strong Thursday for Chinese markets. Hong Kong had staged a rally as investors rotated out of AI hardware stocks into Chinese internet platforms. Technology stocks were among the main laggards in Hong Kong on Friday after Thursday's strong rally.

Strategists said China was not immune to global turmoil. "I don't think China can completely escape the fallout from Wall Street, especially with selling this aggressive," said Pepperstone strategist Dilin Wu.

Global backdrop

The selloff followed a 5.6% plunge in the Nasdaq, which recorded its worst day in 19 months as $3 trillion was wiped off S&P 500 companies.

Investors will watch whether Beijing steps up support measures and whether Chinese tech shares can resume their rotation-driven rally next week.