China, Hong Kong Stocks Slide as Precious Metals and Tech Selloff Deepens
China and Hong Kong equities fell sharply on Thursday as losses in precious metals and technology stocks spilled over into broader sectors, weighed down by tightening liquidity and pre-holiday caution.
By the midday break, China’s Shanghai Composite Index slipped 1% to 4,059.91 points, while the blue-chip CSI300 index also declined 1%.
Precious Metals Shares Hit Hard
Renewed selling pressure in gold and silver triggered steep losses across precious metals stocks. The CSI SSH Gold Equity Index plunged 5.4%, while the CSI SWS Non-ferrous Metal Index dropped 5.6%.
The UBS SDIC Silver Futures Fund, the only silver futures fund available in mainland China, was on course to hit its 10% daily limit down for a fourth straight session, highlighting sustained investor retreat from the sector.
Tech and Solar Stocks Extend Declines
Technology shares weakened further after a global selloff in the sector. The CSI Artificial Intelligence Index fell 1.6%, while the semiconductor index lost 1.7%.
Solar-related stocks also came under heavy pressure after several companies denied cooperation with billionaire Elon Musk. The photovoltaic industry index slid 5.5%, and shares of Jinko Solar dropped 5.6%.
Liquidity Tightens Ahead of Spring Festival
Analysts pointed to seasonal liquidity pressures ahead of China’s Spring Festival holiday as a key driver of the selloff.
“Liquidity is tightening seasonally before the Spring Festival, and investors may choose to reduce positions before the holiday to avoid overseas risks, putting downward pressure on indices,” analysts at Nanhua Futures said in a note.
However, they added that markets could see renewed strength after the holiday, citing strong expectations of policy support that may limit further downside.
In Hong Kong, the benchmark Hang Seng Index fell 1.3%, while the Hang Seng Materials Index slid more than 6%. Baidu’s Hong Kong-listed shares bucked the broader trend, climbing to their highest level in two weeks on optimism surrounding share buybacks and dividends.
Across the region, MSCI’s Asia ex-Japan index fell 1.8%, while Japan’s Nikkei Index declined 1%.
