Global Market: China stocks slip as tech shares fall ahead of central bank meetings

Chinese stocks declined on Monday, dragged lower by technology shares and tracking weakness across regional markets, as investors turned cautious ahead of a busy week of major central bank meetings and corporate earnings, Reuters reported.

At the midday break, the benchmark Shanghai Composite Index was down 0.2%, while the blue-chip CSI300 Index fell 0.5%. Technology stocks underperformed: the ChiNext Composite Index, which tracks growth-oriented companies, dropped 1.7% and Shanghai's technology-focused STAR50 Index tumbled 1.9%, Reuters reported.

Read more: Global Market: China's yuan hits four-year high as dollar weakens ahead of policy meetings


The CSI 5G Communications Index plunged 3.7% in morning trading, reflecting continued pressure on technology-related stocks.

According to Reuters, regional markets were subdued as investors assessed the outlook for the artificial intelligence-driven rally ahead of earnings from major technology companies and policy decisions from leading central banks. Oil prices also eased from six-month highs, offering some relief to markets amid broader uncertainty.

Read more: Global Market: South Korean shares fall over 1% as AI trade concerns weigh; won strengthens

Chinese equities experienced volatile trading last week, with blue-chip shares recording their longest-ever weekly losing streak despite increased trading activity in exchange-traded funds favoured by state-backed investors.

Analysts at Morgan Stanley said concerns over potential selling linked to trust-sector taxation, pressure on e-commerce businesses, weakening macroeconomic conditions and elevated global market volatility had accelerated the market correction, Reuters reported.

The brokerage also highlighted the importance of monitoring whether state-backed investors, commonly referred to as the National Team, step up purchases of domestic equities more visibly.

Investor sentiment remained cautious ahead of policy meetings scheduled later this week by the US Federal Reserve, the Bank of Japan and the European Central Bank. All three are widely expected to leave interest rates unchanged, although policymakers could maintain a hawkish stance amid persistent economic and inflation uncertainties.

In Hong Kong, the benchmark Hang Seng Index edged up 0.4%, while the city's technology shares fell 0.4%, reflecting continued divergence between the broader market and the technology sector.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)