STOCK MARKET REVIEW: under pressure

China’s equity markets returned from the National Day holiday under pressure, with mainland technology and growth stocks bearing the brunt of selling as investors reassessed economic prospects and geopolitical risks. Shenzhen’s growth-oriented shares suffered particularly sharp losses, while Hong Kong’s broader market proved more resilient. The divergence highlighted continued uncertainty over China’s economic recovery, even as investors remained willing to back selected companies benefiting from Beijing’s technological ambitions.

The CSI 300 Index, which tracks leading companies listed in Shanghai and Shenzhen, closed Monday at 4,287.98, down 1.6% from 4,357.62 on September 30, the final session before the mainland’s weeklong holiday. The benchmark declined 0.7% on Monday alone, following a volatile reopening on October 8. The weakness suggested that investors remained cautious about the outlook for major Chinese companies despite the government’s efforts to support confidence in domestic financial markets. 

Growth-oriented shares faced heavier selling. Shenzhen’s ChiNext 300 Index fell 2.3% on Monday, following a 3.1% decline on October 8, reflecting pressure on smaller technology and innovative companies. The retreat pointed to investors’ sensitivity to valuations and the uncertain outlook for corporate earnings, particularly in sectors where expectations of future growth have supported share prices. 

Hong Kong offered a contrasting picture. The Hang Seng Index ended Monday at 24,271.20, up 0.2% from the previous Friday’s 24,211.35, although it remained below its September 30 close of 24,613.27. The Hang Seng TECH Index slipped 0.7% on Monday to 4,169.57, after rebounding 3.1% on Friday. The swings demonstrated the vulnerability of Chinese technology shares to changing international risk appetite, while the broader benchmark’s relative stability suggested that selling pressure was not uniform across the market. 

Chinese companies trading in the United States also showed mixed performance. Alibaba’s New York-listed shares gained 5.4% on Friday before slipping on Monday, while PDD Holdings fell 0.5% on Monday to $80.92 after rising 3.9% in the previous session. The uneven performance reinforced the distinction between confidence in individual Chinese businesses and broader concerns about economic growth. 

The coming week will test whether investors see recent declines as an opportunity or evidence of more persistent economic weakness. Corporate earnings, China’s policy response to domestic demand pressures and developments in international trade will be important indicators. For now, equity performance suggests confidence remains selective, with technology investment offering potential growth opportunities but insufficient reassurance to overcome wider concerns about profitability, geopolitical uncertainty and the strength of China’s recovery.