China’s CSI 300 has suffered a record 10-week losing streak as AI and semiconductor shares plunge, wiping out much of this year’s rally and prompting foreign investors to withdraw billions.
China’s stock market is enduring its longest weekly losing streak on record, a slide that has exposed how sharply the country’s artificial intelligence and semiconductor trade has reversed. The CSI 300 index fell 3.4% last week, taking its run of declines to 10 straight weeks and breaking the previous record set in January 2012, according to the market report behind the latest move. The weakness has been concentrated in the same shares that helped drive Beijing’s spring rally, with chipmakers and AI-linked companies now leading the retreat.
The damage has been especially severe in China’s technology-heavy growth names. The STAR 50 index, which is heavily weighted towards AI stocks, has lost about 40% since 30 June, while a broader index of AI shares has fallen 35% from its peak this year, according to the reports. Semiconductor stocks have been hit even harder: the CSI All Share Semiconductors index is down roughly 45%, reflecting growing investor concern that valuations ran ahead of fundamentals during the first-half surge.
The sell-off has not been confined to a single market measure. From their highs this year, the Shanghai Composite has dropped 12%, the Shenzhen Component 28% and the CSI 300 17%, while the latter remains about 30% below its February 2021 peak, according to the market data cited in the reports. Bloomberg has also noted that no other major technology index globally has performed worse than the STAR 50 since 1 July, underscoring how abruptly the enthusiasm around China’s AI story has faded.
Foreign capital has also started to move the other way. Investors pulled more than $13 billion from mainland Chinese equities through Hong Kong in the third quarter, reversing more than half of the inflows seen in the spring, according to the report. At the same time, one update from the market said the CSI 300 rebounded 0.3% after the 10-week slump, helped by heavier buying into broad-based exchange-traded funds favoured by state-backed investors, although official confirmation of intervention has not been issued. The rebound suggests the pressure on Chinese equities may be easing at the margin, but the scale of the recent drawdown shows how fragile confidence remains.
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