The Shangai Composite Index Closes 1.24% Lower

The Shanghai Composite fell 0.4% to 3,798 on Wednesday, while the Shenzhen Component dropped 1.5% to 13,313, as investors weighed escalating Middle East tensions against a rebound in battered technology stocks. Tensions in the region intensified after Iran launched ballistic missiles toward US positions following a brief period of relative calm, though US Central Command said all projectiles were intercepted. Banking shares were among the biggest drags, led by Industrial and Commercial Bank of China (-1.0%), Agricultural Bank of China (-1.0%), and Bank of China (-1.3%). In contrast, technology stocks rebounded from recent losses, with Zhongji Innolight (1.6%), Eoptolink Technology (1.3%), NAURA Technology (1.1%), and Cambricon Technologies (2.6%) advancing despite persistent concerns over elevated valuations and AI-related spending. Attention is now turning to the Politburo meeting later this week, where investors hope to gain fresh insight into China's economic policy agenda.

The Shangai Composite Index fell 48 points or 1.24 percent on Tuesday to close at 3810 points. Leading the losses are Huayu Automotive (-4.97%), China Merchants Securities (-4.55%) and China Railway Cons (-3.85%).

The Shanghai Composite fell 1.16% to close at 3,813.3 on Tuesday, while the Shenzhen Component slumped 4.52% to 13,509.7, hitting its lowest level since early April, as a broad selloff in semiconductor stocks weighed on Asian markets. The sector came under heavy pressure amid growing concerns that massive investments in AI may not generate returns quickly enough to justify lofty valuations. Sentiment was also dampened by developments in China's semiconductor industry, highlighting the country's rapid technological advances and intensifying competition in the global chip market. Among the steepest decliners were Cambricon Technologies (-9.11%), Zhongji Innolight (-15.69%), Eoptolink Technology (-17.13%), GigaDevice Semiconductor (-10%), and SMIC (-4.92%). Investors are now looking ahead to the Politburo meeting later this week, where policymakers are expected to provide fresh guidance on China's economic strategy for the second half of the year.