China's Star 50 index tumbles as chip and AI stocks sell off again
The index closed down 4.82% at 1,456.32 points, extending a slide that has wiped more than a third off its value since July, according to a market report from 24TopNews.
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China's Star 50 index, which tracks the 50 largest companies on the country's sci-tech innovation board, fell 4.82% on Thursday to close at 1,456.32 points, according to a market report from 24TopNews. The broader Star Composite Index, covering the same board, closed 4.55% lower at 1,732.58 points, Bastille Post reported.
The drop was concentrated in semiconductor and AI names. Changguang Huaxin fell 20.00%, Shijia Photon fell 17.40% and Juguang Technology fell 13.43%, 24TopNews reported. China's broader Shanghai Composite Index slipped just 0.3% the same day, while Hong Kong shares fell nearly 2%, Business Recorder reported.
The index is now near a one-year low, down roughly 15% from its June peak and off by more than a third since July 1, Business Recorder reported. Even after Thursday's fall, it still trades at about 100 times earnings, the outlet reported. Wang Zhuo, a partner at Shanghai Zhuozhu Investment, told Business Recorder that excessive optimism toward chipmakers and other "hard tech" shares earlier in the year had driven valuations to irrational levels. Rising US Treasury yields were also cited as a factor pressuring the shares on the day, Business Recorder reported.
Thursday's slide follows a string of sharp swings in the index in recent sessions, as repeated bouts of profit taking in semiconductor and AI names have replaced its earlier run of gains. Each prior drop has drawn a similar explanation: stretched valuations, crowded positioning and a rotation out of this year's best performing tech names, often compounded by rising global bond yields that make long duration, high multiple growth stocks harder to justify. The pattern suggests investors are still testing how much of the rally in Chinese tech was built on fundamentals rather than momentum, leaving each rebound attempt vulnerable to another quick reversal if yields or valuation concerns resurface.