The CSI 300, which is the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, closed down 1.4% Wednesday, erasing all of its gains this year amid weaker-than-expected economic data.
Investors are losing interest in Chinese stocks after a sharp spike coming out of the world’s stickiest lockdown measure during the Covid pandemic.
Unfavorable economic data prompted leading financial firms such as JPMorgan Chase & Co. or Barclays Plc to cut China’s 2023 growth forecasts. A weaker Chinese yuan and developers’ financial woes added to persistent worries over growth and geopolitics, especially with Western countries.
Tension between China and the U.S. flared up again after Beijing banned purchases of U.S.-based chipmaker Micron Technology Inc. that sparked anger in some of the lawmakers, calling the U.S. to reiterate.
The Cyberspace Administration of China (CAC) stated that Micron failed to pass a cybersecurity review.
The U.S. chipmaker also said that a ban on selling to Chinese companies could cost it as much as a high single digit percentage of its annual revenue.
Meanwhile, the Shanghai Composite (SSEC) remained above its starting point of this year by around 2%. However, the SZSE Component was 2% lower in 2023.