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China’s CSI 300 Enters Bear Market as Asia Selloff Spreads
China’s benchmark CSI 300 index fell into a bear market Thursday after 10 consecutive weekly declines, according to LSEG data cited by CNBC. Bloomberg attributed the drop to fading stimulus hopes, weak earnings and concerns over the global artificial intelligence (AI) trade. Stocks in South Korea, Japan and Taiwan also retreated. The CSI 300 stood at 4,060.19 at Thursday’s morning break, roughly 20% below its June peak. It was down 13.94% from its January 1 level. Policymakers have offered little new support. On Tuesday, China kept its one-year loan prime rate (LPR) at 3.0% and its five-year LPR at 3.5%, leaving both unchanged for 17 straight months. Maybank analysts said stable headline growth reduced the urgency for fresh fiscal and monetary stimulus, Reuters reported. Third-quarter growth reached 4.5%, beating forecasts. BeInCrypto previously reported that the losing streak continued despite the stronger data. State-backed buying has also been smaller than earlier state selling. Central Huijin, which leads China’s market stabilization efforts, raised $231 billion through exchange-traded fund (ETF) sales in the first half. Since purchases resumed in July, it has reinvested only about $43 billion, Bloomberg Intelligence analysts estimate, leaving roughly $188 billion available. The analysts warned that state buying alone may not produce a lasting recovery. Selling spread beyond mainland China. South Korea’s KOSPI fell 2.56% by midday to 5,588.94, down from its previous close of 5,735.66. Japan’s Nikkei 225 traded 1.65% below Wednesday’s close by early afternoon at 63,554.76. Taiwan’s TAIEX slid 1.15% from its prior close to 46,346.92 in late-morning trade. Hong Kong also lost ground. A gauge of major Chinese companies listed in the city fell as much as 2.9% Thursday. The Hang Seng Tech Index had already touched a two-year low Tuesday as AI hardware stocks fell. On Wednesday, Tencent slipped below HK$400, while CATL dropped on weaker profit growth and fierce competition. Some long-term investors have increased their China exposure this year. Sovereign wealth funds placed $14.2 billion into mainland China and Hong Kong through September, according to Global SWF data shared with CNBC. That was nearly triple the $4.9 billion these funds invested in all of 2025. Saudi Arabia’s Public Investment Fund led with $6 billion, and four Gulf funds accounted for nearly 70% of inflows. Deals included a minority stake in Luckin Coffee and Alibaba’s $10.2 billion share sale. Andrew Wang, who leads consumer investments in Mubadala’s private equity arm, pointed to market valuations. “Valuations are lower than they’ve been in years. I think this will be a really good vintage for investors in China,” he said. China remains a small destination for sovereign capital, though. The US attracted $132.4 billion in sovereign investment over the same nine months, Global SWF said. Europe and the UK drew $44.6 billion.
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