Chinese stocks fell sharply in early trade on Thursday, tracking a broad selloff in global markets as stronger-than-expected US inflation data fuelled concerns that interest rates could remain elevated for longer.
The Shanghai Composite Index dropped 1.5%, while the blue-chip CSI300 Index declined 1.7%. Technology stocks led the losses, with the tech-focused STAR50 Index plunging 3.9% and the ChiNext Composite Index, which tracks growth-oriented companies, falling 3.1%.
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In Hong Kong, the benchmark Hang Seng Index slipped 1% in early trading, reflecting the weakness across regional equity markets.
According to Reuters, US stocks fell overnight after data showed that consumer prices rose more than expected in the previous month, reviving concerns that the Federal Reserve could raise interest rates. The US dollar strengthened as investors reassessed the outlook for monetary policy.
The hotter-than-expected inflation reading heightened fears that the Federal Reserve may maintain a restrictive policy stance for longer or consider further rate hikes, putting pressure on risk-sensitive assets, including equities.
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Technology stocks were particularly vulnerable as investors weighed the prospect of higher borrowing costs and elevated valuations against the changing interest-rate outlook.
The weakness in Chinese markets mirrored a broader retreat in global equities, with investors turning cautious amid uncertainty over the US inflation trajectory and its implications for central bank policy.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)
