China stocks log biggest weekly loss since December as tech drags

By Jiaxing Li

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 000001 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 December 30, 2024.

** The blue-chip CSI 300 Index 3399300 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 U.S. counterparts' weak session on Wall Street overnight. The CSI AI Index 9930713 lost 4.2% and the CSI Semiconductor Index (.CSI931865) declined 4.3%.

** Defensive plays also posted losses, with the banking sector (.CSI399986) slipping 1%, liquor 3399997 down 1.1% and consumer staples 0000932 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 HSI 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 HHSTECH 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 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."