Lee Sees AI Selloff Ending as Yields Drop Below 5%
Fundstrat's Tom Lee says the AI selloff is nearly over, citing yields under 5% and a crowded short trade in tech, with Nvidia and crypto among his preferred…
The CSI 300 fell for a 10th straight week, its worst run since 2005, as AI and semiconductor stocks led the decline.
Last week, the CSI 300 index fell 3.4%, marking its 10th straight weekly loss — the longest such run since the benchmark's creation in 2005 — with AI stocks dragging the market lower.
The sell-off is being led by chipmakers and AI firms, which drove Beijing's spring rally earlier this year. The STAR 50 index, where five AI companies make up more than 30% of its weight, has tumbled 40% since June 30.
With 10 consecutive weeks of declines, this streak has surpassed the previous record of consecutive weekly losses set in January 2012.
Since reaching their highs this year, the three most widely followed Chinese stock indexes — the Shanghai Composite, Shenzhen Component, and CSI 300 — have shed 12%, 28%, and 17%, respectively.
An index of pure AI stocks has fallen 35% from its peak this year, a steeper drop than any of the above.
Semiconductors, which saw the biggest AI-fueled boom in the first half of 2024, are now suffering the deepest decline in the second half. The CSI All Share Semiconductors index has posted a 45% drawdown.
Bloomberg reported that no other major technology index globally has fared worse than the Star 50 since July 1.
In the third quarter, foreign investors pulled over $13 billion from mainland stocks via Hong Kong. That was the largest quarterly outflow in a year and wiped out more than half of the inflows seen in the spring.
The CSI 300 now trades 30% below its February 2021 high.
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