On October 29, 2026, Chinese stocks experienced a notable downturn, primarily influenced by a significant selloff in technology shares. The Shanghai Composite index dropped by 0.9%, while the blue-chip CSI300 index saw a decline of 1.2%, reflecting broader anxieties in the market.
Deepening Tech Troubles
Tech stocks were the primary contributors to the losses, with the ChiNext Composite index plummeting 3.6% and the STAR50 index, focused on tech companies, tumbling by 4.2%. In the morning trading session, the CSI 5G communications index fell sharply by 6.1%.
'Valuations for the tech AI hardware names are now close to the historical trough and imply a major deceleration in EPS growth ahead,' said James Wang, head of China strategy at UBS Investment Bank Research.
Among individual stocks, Yushu Technology, known for its robotics, saw its shares fall 4.3% after reporting a decline in net profit, despite a 70% surge in revenue year-over-year.
Impact of Federal Reserve's Decision
The Federal Reserve's decision to keep interest rates unchanged did not alleviate concerns in the market. Investors are wary, especially as the Fed awaits further inflation data, which it deems 'elevated.'
- Shanghai Composite index down 0.9%
- CSI300 index slips 1.2%
- ChiNext Composite index falls 3.6%
- STAR50 index declines 4.2%
- CSI 5G communications index plunges 6.1%
James Wang noted that while investor sentiment around AI remains fragile, he believes that the risk-reward balance is starting to look more appealing as the year concludes. 'Interest may come back towards the end of the year as investors rebuild their portfolios for the new year,' he added.
Regional Market Responses
The downturn in Chinese stocks coincided with mixed responses across other Asian markets. The Hang Seng index in Hong Kong managed a slight increase of 0.1%, yet local tech shares fell by 2%. This reflects a broader trend of market uncertainty as companies brace for upcoming earnings reports, including major players like Amazon and Intel.