China's blue-chip stocks hit over one-year low on AI-linked supply chain selloff

Business Recorder reported, citing Reuters, that China's CSI300 blue-chip index slid 1.3% by the lunch break on Friday, touching its lowest point since August 2025 as AI-linked supply chain shares came under heavier selling. The Shanghai Composite Index lost 1.2% over the same stretch, while Hong Kong's Hang Seng gained 1.1%, helped by strength in internet companies.

Among the sector indices, the 5G Communication Index shed up to 6% and reached a two-month trough, while the tech-focused STAR50 lost close to 4% and sank to a five-month bottom. Zhongji Innolight, which makes optical transceivers for AI data centres, slid 5.4%, and memory chipmaker CXMT lost nearly 5%. Money shifted toward defensive and traditional areas, with the Coal Index up 1.4% and consumer staples gaining 0.6%. Hong Kong tech majors bounced 1.6%, though that index remained close to a two-year low.

The People's Bank of China rejected foreign criticism of its exchange-rate approach on Thursday, stating that it had not engaged in competitive currency weakening. European officials want a firmer yuan as a way to temper China's trade surplus, now at a record, alongside a jump in exports. UBS analysts said currency strength could weigh on earnings over a longer period for Chinese firms with overseas sales, many of which have not fully hedged.