The Chinese stock market fell again on the second consecutive day, driven by deepening adjustments in the AI sector. The Shanghai Composite Index closed down 1.44% at 3,599.02, the Shenzhen Component Index dropped 2.73% to 10,833.78, and the ChiNext Index fell 4.13% to 2,413.63.
The decline in the Chinese market was influenced by concerns over profitability stemming from increased AI investments by major U.S. tech companies, as well as a global correction in technology stocks. While companies like Alphabet and Amazon are pouring substantial funds into AI infrastructure, doubts about the returns on these investments have led to a sell-off in global AI-related stocks. This negative sentiment has also impacted the Chinese market, particularly affecting stocks related to optical communications, printed circuit boards (PCBs), and semiconductors, which are crucial for AI computing infrastructure. Analysts noted that the Chinese AI tech sector has been under adjustment for several months, and the additional external pressures have further dampened investor sentiment.
According to Dongfang Wealth, domestic and foreign funds have concentrated their sell-offs on AI computing infrastructure stocks, particularly in optical communications and PCBs. Domestic institutional investors have sold off PCB and optical communication stocks, while foreign investors have also exited from the optical communication, PCB, and AI application sectors.
In contrast, the pharmaceutical and biotech sectors showed strength, with Guilin Sanjin and Lingrui Pharmaceutical hitting their daily price limits. The positive performance of U.S. biopharmaceutical company Eli Lilly contributed to this trend, as its third-quarter net profit rose 16% year-over-year to $6.451 billion, exceeding market expectations. Sales of its obesity and diabetes treatments, Mounjaro and Zepbound, increased by 65% and 49%, respectively. The company also raised its annual revenue forecast to between $91 billion and $92 billion.
The shipping and port sectors also experienced gains, with Jinjiang Shipping reaching its daily price limit and China Ocean Shipping seeing significant increases. News of rising shipping rates boosted investor sentiment. Maersk announced it would raise rates on routes from the Far East to Northern Europe and the Mediterranean, effective November 16, 2026. Following mid-October, major global shipping companies have also raised rates on routes from the Far East to Europe, the Mediterranean, and North Africa.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7138 yuan, a slight increase of 0.0009 yuan from the previous day, reflecting a 0.01% decline in the yuan's value.
* This article has been translated by AI.
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