Major Chinese tech indices declined sharply on Monday, with the CSI 300 Technology Index dropping 4.3% as weak domestic demand and regulatory uncertainty weighed on market sentiment. Key players including Alibaba, Tencent, and Baidu posted losses exceeding 5%.
- CSI 300 Technology Index down 4.3% on Monday
- Alibaba, Tencent, and Baidu all declined over 5%
- November retail sales rose 2.1%, below forecast
- Tencent’s ad revenue growth slowed to 4.6% YoY
- Five-day net outflows from Chinese equities totaled $1.3 billion
- Hang Seng Tech Index fell 4.9% amid broader market weakness
Chinese technology equities posted steep losses Monday amid growing investor caution over persistent economic slowdowns and unresolved regulatory pressures. The CSI 300 Technology Index closed at 4,872.61, down 4.3% from Friday’s close, marking its worst single-day performance since July 2024. Alibaba Group fell 5.7%, Tencent Holdings dropped 5.2%, and Baidu Inc. shed 5.9%, dragging the broader tech sector lower. The decline followed weaker-than-expected retail sales data released Sunday, which showed a 2.1% year-on-year increase in November—below the 3.0% forecast. Industrial output also rose only 5.1%, missing expectations. These figures reinforced concerns about consumer spending resilience and the pace of economic recovery in China’s largest economy. Market analysts noted that a lack of clear policy signals from Beijing on tech sector reforms further dampened investor appetite. Despite government attempts to stimulate growth through targeted infrastructure spending and fiscal incentives, the tech sector’s earnings outlook remains under pressure. Analysts cited rising operational costs, intensified competition in cloud computing, and slowing ad revenue growth as key challenges. For instance, Tencent’s Q3 ad revenue rose just 4.6% year-on-year, far below the 12% growth seen in the same period last year. The sell-off extended beyond pure tech names, affecting broader Chinese equities. The CSI 300 Index fell 2.8% while Hong Kong’s Hang Seng Tech Index dropped 4.9%. Foreign institutional investors responded by reducing exposure, with net outflows from Chinese equities reaching $1.3 billion over the past five trading days.