Chinese Stocks Falter on Continuing Global Slump in Tech Shares

China's stock markets continued to suffer from the global slump in tech shares that led the tech-heavy Nasdaq index in New York to five consecutive days of declines. However, investment banks Morgan Stanley and Goldman Sachs said the declines present a buying opportunity, increasing their holdings in some Chinese mainland stocks.

The benchmark Shanghai Composite Index fell 2.3 percent on Friday, closing the week with a 1.6-percent loss. Its tech-focused STAR Market index retreated 1.7 percent on Friday. The Shenzhen Component Index contracted 3.4 percent on Friday, also ending with a 1.6-percent weekly decline. The ChiNext tech index plunged 4 percent on Friday for a weekly loss of 1.4 percent.

"The global selloff in technology shares this week sent markets around the world into decline, including those in China," said Dai Qing, an analyst with Changjiang Securities.

Among top tech shares on the Chinese mainland, chipmaker Cambricon shed 3.1 percent on Friday, while Biwin Storage Technology lost 4.3 percent and Hygon Information Technology dropped 4.3 percent. Zhongji Innolight, the world's leading optical module maker, slumped 5.3 percent.

In Hong Kong, the Hang Seng Index dropped 5.2 percent for the week to a one-year low; its tech index slumped 7.6 percent, the deepest weekly fall so far this year. Semiconductor Manufacturing International, the mainland's biggest chip producer, fell 7 percent on Friday, and Alibaba shares fell 14 percent this week to a 16-month low after US-based Anthropic accused the Chinese technology giant of illegally accessing its AI Claude model to mine information.

Five Chinese tech shares debuted trading in Hong Kong on Friday, with four of them bucking the downward market trend. Shares in Apple supplier Lingyi iTech closed down 4.6 percent from their offer price, but SG Micro, Circuit Fabology Microelectronics Equipment, Zhongke Wenge AI Science & Technology and Keytop Parking all rose.

Shares in Trip.com, a leading Chinese one-stop travel service, fell 3 percent on Friday after it missed analysts' forecasts with a first-quarter net income decline of 42 percent to 2.5 billion yuan (US$363 million).

According to 21st Century Business Herald, dozens of Chinese mainland-listed companies are bolstering share prices by initiating buybacks. Among them are Shenzhen-listed electronics circuit digital solution provider Fastprint and Shanghai-listed Jinlihua Electric, and a number of biotech companies.

Current slump aside, tech companies are continuing to seek listings on Chinese exchanges. Felix Fei, assurance leader of EY's China Central and managing partner of its Shanghai branch, said companies filing IPOs in the first half of the year raised an aggregate 1.3 billion yuan, a 49-percent increase from a year earlier.

"This demonstrates that the capital market is efficiently allocating resources to sectors boasting the strongest growth potential, giving impetus to achieving self-reliance in science and technology, and to industrial structural upgrading," Fei said.

Elsewhere in Asia, Japan's Nikkei lost 2.65 percent in the past five trading days while the chip-heavy South Korean Kospi index plunged 7.1 percent.

On Wall Street, sentiment on tech stocks this week briefly revived after better-than-expected earnings results from Micron but faded quickly after Apple announced prices hikes for iPad and MacBook models, citing soaring prices for memory chips and storage caused by demand from AI data centers.

Sentiment was also dented by reports that OpenAI may delay its mega IPO until next year after SpaceX shares plunged from their initial surge to near debut levels after a record-setting IPO. The Nasdaq dropped 0.24 percent in its fifth consecutive loss, for a weekly decline of 4.6 percent. The broader S&P 500 index closed flat on Friday but registered a drop of 2 percent for the week. In Europe, the Stoxx600 index fell 0.7 percent on Friday.