Business · Updated 27 Oct, 04:57 pm IST
China's AI and chip stocks plunge as STAR50 index falls sharply
Why it matters for readers: It explains why headlines about AI don't always mean steady stock gains—markets can reverse fast on policy and demand worries.
- The STAR50 index of AI and semiconductor leaders dropped about 40% in less than four months, wiping out roughly $480 billion in market value.123
- AI-related stocks account for about 42% of China's market capitalisation and 57% of turnover on mainland A-shares and Hong Kong H-shares, amplifying the impact.12
- China's broader blue-chip index has fallen about 20% from highs reached in June, ending a two-year rally that followed stimulus-driven gains.12
- Traders and managers cited high prices, tax bills and the prospect of bans on Chinese equipment in data centres as factors contributing to the sell-off.12
- By comparison, US AI stocks have only led to a modest Nasdaq drawdown of about 6% from a recent record high.12
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