Global Market: Chinese stocks slide as semiconductor and robotics shares tumble

Chinese stocks fell sharply on Wednesday, led by heavy selling in semiconductor and robotics companies, as concerns over the broader economy and disappointing corporate earnings weighed on investor sentiment. Hong Kong shares, meanwhile, edged higher, Reuters reported.

The blue-chip CSI300 index fell 2.4% by the midday break, while the Shanghai Composite Index declined 2%. In Hong Kong, the Hang Seng benchmark was up 0.2%.

Unitree, one of China's best-known humanoid robot makers, surged nearly 500% in its Shanghai trading debut by midday. The initial public offering attracted significant investor attention as robotics becomes an increasingly important area of competition in the technology rivalry between China and the United States.


However, the enthusiasm surrounding Unitree did not prevent a broader sell-off in technology stocks. The CSI Robot Index dropped more than 6%, while semiconductor shares declined about 7%, tracking weakness across global technology stocks as long-term borrowing costs climbed.

Reuters reported that investors were increasingly focused on earnings quality and companies’ ability to turn artificial intelligence investments into sustainable revenue, while concerns about China's broader economic outlook continued to weigh on sentiment.

Baidu, China Unicom weigh on sentiment

In Hong Kong, technology giant Baidu fell 12% after reporting second-quarter results that came in below market expectations. The decline added to pressure on the technology sector and reinforced concerns about the earnings outlook for companies exposed to China's AI and digital economy.

China Unicom also dropped nearly 8% after reporting a more than 30% decline in first-half net profit, according to Reuters.

The weakness extended across China's major technology-focused indexes. The Shenzhen index fell 3.86%, while the ChiNext Composite Index dropped 4.98%. Shanghai's technology-heavy STAR50 index declined 6.07%.

Property shares offer some support

Financial and property stocks performed relatively better in both mainland China and Hong Kong, helped by hopes for additional support for the struggling property market.

Investor sentiment toward the sector improved after China announced revised regulations allowing more flexible use of housing provident fund balances. The move is expected to provide additional support to housing demand and potentially help stabilise the property market.

Still, the broader market remained under pressure as investors balanced hopes for policy support against elevated borrowing costs, weak economic momentum and growing scrutiny of corporate earnings.

The sharp decline in semiconductor and robotics shares also highlighted the volatility surrounding China's technology sector. In this sector, strong expectations for artificial intelligence and advanced manufacturing have pushed valuations higher even as investors increasingly demand evidence of sustainable earnings growth, Reuters reported.