China AI Index plunges 40% as investors reassess valuations
China's STAR 50 AI index fell more than 40% over four months, prompting analysts to question profit prospects while noting continued government support for the sector, CNA reported on 29 October. Earlier, News. com. au said the index had lost about 40% of its value in the same period as U. S. AI shares rose on Wall Street.
Decrypt estimated that mainland Chinese equities shed roughly $2. 4 trillion in market value since May as confidence in AI profitability waned. Reuters noted that recent volatility in AI-related stocks and a shift in bond-equity correlations signalled a more cautious phase for the sector. Another Reuters report highlighted that Chinese technology shares fell sharply amid concerns over AI demand and export restrictions, prompting investors to move toward defensive assets. CNN observed growing investor unease about AI firms' financial health, leading to a rare split between the S&P 500 market-value and equal-weight indices and a drop in 10-year Treasury yields. The downturn began with a renewed decline in big-tech stocks that drove global hedge-fund strategies to record their worst day since the pandemic, forcing deleveraging across the sector, Reuters said.
