Chinese shares continued lower on Friday, extending a sharp downturn from Thursday, with investors taking a more cautious attitude toward AI-related shares, according to a market analyst.
Timothy Pope, a market analyst at China Global Television Network (CGTN), said selling pressure was concentrated in growth stocks while trading turnover pulled back.
"On Friday, we saw that the Chinese mainland markets continued lower. That came after a sharp downturn on Thursday. Wednesday actually was a really strong session for A-shares, but that positive momentum really didn't last. Today we saw the Shanghai Composite shed another 0.6 percent. But the real selling pressure was on the growth stocks, with the Shenzhen Component falling two percent and the ChiNext plunging 3.3 percent. In fact, more than 4,700 A-shares finished lower on Friday," said Pope.
The analyst also noted the impact of Jensen Huang's scandal and his resignation from Nvidia on the market.
"The scandal surrounding Jensen Huang and his departure from Nvidia -- the company basically underpins the global AI boom -- has had ripple effects here too. But we haven't seen a complete sell-off of AI infrastructure stocks. They were particularly popular on Wednesday, but over the past two sessions investors have become much more selective. Chinese AI chip designer Cambricon, for example, has really managed to hold onto a lot of gains, while a lot of other companies supplying the AI industry have been hammered," he said.
Investors ended the week with a distinct preference for more traditional sectors. Banks and coal miners attracted buyers, along with cinema operators and pork producers, while much of the technology sector looked incredibly lackluster, said the analyst.
Chinese shares extend losses as growth stocks slump: analyst
