FX.co ★ China Stocks Fall on Profit-Taking

The Shanghai Composite Index decreased by 0.39%, concluding at 4,003, while the Shenzhen Component Index fell by 1.03% to settle at 13,289 on Tuesday. This slump occurred as investors opted to secure profits following the Shanghai index reaching its highest point in a decade. Investor sentiment was further dampened by reports indicating that China is in the process of developing a rare earth export system. This system could potentially limit access for certain US companies, thereby heightening the possibility of renewed trade tensions between China and the United States, as rare earth elements continue to be a focal point in ongoing negotiations. Additionally, investors shifted their preference from high-flying technology and AI-linked stocks to high-dividend value stocks, driven by skepticism regarding whether tech earnings could sustain their elevated valuations. In light of bubble concerns, it is reported that several seasoned Chinese fund managers have suspended new subscriptions to their offerings. Significant losses were observed among technology companies, including Zhongji Innolight (-4.5%), Eoptolink Technology (-3%), Cambricon Technologies (-4.4%), Shannon Semiconductor (-9.8%), and Victory Giant (-4.2%).