China Stocks Extend 12-Week Slide as AI Selloff Spreads
China stocks extended their record losing streak to 12 weeks on Friday, as global concerns over returns on artificial intelligence spending pressured technology shares. The CSI 300 fell 1.4% that day and has lost 15% in 12 weeks. It dropped about 8.5% in October, its steepest monthly decline in more than a decade.
The Shenzhen ChiNext Index fell 4.1%, while the CSI 5G Communications Index dropped 6.2%. Optical-module maker Eoptolink Tech slid about 14% on Friday, leaving it down roughly 50% for October. The declines continued despite estimated purchases of up to $25.5 billion in stocks by state-backed investors earlier in the week.
AI spending concerns also weighed on global technology stocks, including US companies and Asian chipmakers. South Korea’s SK Hynix fell more than 7%, and the Kospi lost about 3.5% on Friday. Hong Kong’s Hang Seng Index moved in the opposite direction, gaining around 1.5% as investors selectively bought some technology shares. For traders, the diverging performance points to ongoing volatility and a market focused on whether heavy AI investment can deliver sufficient returns.
Bearish
The report is bearish for crypto in the near term because it highlights a broad risk-off move in technology and growth assets. China’s CSI 300 has fallen for 12 straight weeks, while technology benchmarks and Asian chipmakers have also dropped. The market-wide concern is whether heavy AI investment will produce adequate returns. If investors cut exposure to higher-risk assets, crypto can face selling pressure alongside tech equities, particularly during periods of elevated volatility or weaker liquidity.
Past episodes of rising interest-rate concerns or sharp technology-stock selloffs have often coincided with reduced appetite for speculative assets, although the relationship is not consistent and crypto can move independently. Traders may watch equity-index direction, volatility, liquidity, and whether weakness spreads to other risk markets. State-backed buying and Hong Kong’s gain show that declines are not uniform and could limit contagion.
Over the longer term, this article does not establish a direct change in crypto fundamentals. A sustained recovery in equities or clearer evidence that AI spending is profitable could improve risk appetite; continued losses and concerns about returns could instead prolong cautious positioning. The expected crypto impact is therefore bearish, mainly through sentiment and broader risk appetite rather than a direct crypto-market catalyst.