China's stock market continues to face heavy selling pressure, with the benchmark CSI 300 index recording its 12th consecutive weekly decline on October 30. This marks its longest losing streak since the index was launched in 2005.
The prolonged sell-off has reportedly wiped out nearly USD 3.5 trillion, or approximately Rs 329 lakh crore, in market value since May's peak.
Historic Market Fall
The CSI 300 tracks 300 major companies listed on the Shanghai and Shenzhen stock exchanges.
The index had already fallen for 11 consecutive weeks by October 23. Another weekly decline extended the losing streak to 12 weeks.
It has also dropped more than 20 percent from its June peak, entering bear market territory.
Weak Domestic Demand
One major reason behind the crash is weakening domestic consumption.
Despite China's strong manufacturing and export performance, households remain cautious about spending.
Weak demand and intense competition have forced several companies to reduce prices, putting pressure on profit margins.
Banking, electric vehicles and technology companies are among the affected sectors.
Disappointing Earnings
Corporate earnings have further weakened investor confidence.
According to Bloomberg, companies in the MSCI China Index that reported third-quarter results missed market expectations by approximately 9 percent on average.
The disappointing performance has raised concerns about future profitability and business growth.
AI Stocks Tumble
Technology and artificial intelligence stocks have also faced substantial selling pressure.
Investors are questioning whether heavy spending on AI infrastructure will generate sufficient future returns.
The STAR 50 index has witnessed sharp declines, particularly among semiconductor and AI hardware companies.
Selling pressure in US technology stocks has further affected Asian markets.
Property Market Troubles
China's struggling property sector remains another major concern.
Weak real estate activity has affected household confidence, spending and investment.
Although Beijing has introduced supportive measures, investors remain unconvinced that existing stimulus will revive demand.
China's economy expanded 4.5 percent year-on-year during the third quarter, but the growth failed to restore market confidence.
Bloomberg data indicates that approximately USD 3.5 trillion in market capitalisation has disappeared since May, equivalent to Rs 329 lakh crore at Rs 94 per dollar.
