China stocks slip from 5-week high as tech firms tumble amid state warning, cross-strait tensions while all 10 IPOs surge

Name: US House Speaker Kevin McCarthy meets Taiwanese President Tsai Ing-wen, despite Beijing’s warnings
Uploaded: 2023-04-10T02:48:09.000Z
Duration: 3 min 10 s
Description: US House Speaker Kevin McCarthy meets Taiwanese President Tsai Ing-wen, despite Beijing’s warnings

Stocks that rallied on ChatGPT link tumbled after a state-run daily called for regulatory surveillance amid concerns about excessive valuations

All 10 IPOs surged on the busiest day for new listings in the onshore market since November 2021

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People cross the pedestrian bridge with a screen showing the latest stock exchange data in Lujiazui main financial district of Shanghai on March 16. Photo: EPA-EFE

Zhang Shidongin Shanghai

Published: 10:48am, 10 Apr 2023Updated: 3:44pm, 10 Apr 2023

China stocks slipped from a five-week high after a state-run daily warned of excessive valuations in artificial intelligence-linked companies, while cross-strait tensions heightened. All 10 debutants surged in the local market’s busiest day of new listings in 16 months.

The CSI 300 dropped 0.5 per cent to 4,104.81 at the close of Monday trading, after reaching the highest level since March 3 last week. The Shanghai Composite Index retreated 0.4 per cent to 3,315.36, while the Shenzhen Composite Index sank 1 per cent to 2,136.43. Hong Kong’s financial markets are closed for the Easter holiday.

A gauge of technology stocks slid 3.8 per cent, the biggest loser among 10 industry groups in the CSI 300 Index. Hithink RoyalFlush Information slumped 12 per cent to 193.24 yuan and 360 Security Technology lost one-tenth of its value to 16.74 yuan, after the state-run Economic Daily called for regulatory oversight on AI-linked stocks after their recent surge.

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US House Speaker Kevin McCarthy meets Taiwanese President Tsai Ing-wen, despite Beijing’s warnings

“The [AI] thematic speculation has already reached an extreme in the short term,” said Qiu Xiang, a strategist at Citic Securities in Beijing. “The macro environment isn’t supportive of a sustained play now. The market will not ignore corporate earnings just to focus on thematic ideas.”

The Shanghai Composite had risen 15 per cent from an October low through Friday, buoyed by China’s exit from its restrictive zero-Covid policy. Gains have multiplied recently after manufacturing and services gauges indicated economic recovery was strengthening.

Trading volume surpassed 1 trillion yuan (US$145 billion) every day this month, prompting Yingda Securities to predict an imminent bull run.