China's Indexes Register Sharp Losses Amid Global AI Rout

Li Chen
26 Jun, 2026
Hong Kong

China's benchmark indexes faced selling pressure amid an Asia-wide decline, driven by a sharp sell-off in AI- and semiconductor-related stocks. 

The Hang Seng Index decreased 2.6%, and the mainland-focused CSI 300 Index fell 2.8% as investors questioned the level of return on investment in AI infrastructure. 

The market rally in the previous session quickly faded as investors grew wary of the cost of building AI data centers and uncertain returns on investment. 

For the week, the Hang Seng Index dropped nearly 5%, and the CSI 300 Index declined 1.4% amid growing concerns over AI valuation and lagging returns. 

The market sell-off across Asia dragged down the Nikkei 225 stock average by 4.4% and the Kospi by 7.6%, and they declined 3.6% and 8% in the week, respectively. 

Brent crude oil prices decreased 2% to $73.76 a barrel, and about 20 oil tankers passed through the Strait of Hormuz and eased concerns over the supply in global markets.

On the economic front, China's fiscal spending in the five months to May rose 0.8% to 11.4 trillion yuan, or $1.6 trillion, according to the latest data from the finance ministry. 

The central government's steady spending provided economic support for the heavy industries and defense-related expenditures. 

Central government spending increased 6.5% to 1.7 trillion yuan, while local government spending inched lower 0.1% to 9.7 trillion yuan. 

 

China Indexes and Stocks 

The Hang Seng Index decreased 2.6% to 22,557.37. The mainland-focused CSI 300 Index also dropped 2.8%, reaching 4,878.74. 

The steep decline in AI-related stocks dragged down semiconductor stocks, AI model makers, and infrastructure developers. 

Knowledge Atlas Technology dropped 10% to HK$2,098.0, MiniMax Group fell 8.4%, and SMIC decreased 6.5% to $80.35. 

Lingyi iTech (Guangdong) Co. rose as much as 6% to HK$11.80 before settling at HK$11.45, below its offer price of HK$10.18, and the precision parts maker and Apple supplier completed its Hong Kong listing.