The Chinese stock market experienced a second day of decline with the Shanghai Composite falling 0.39% and the Shenzhen Component decreasing by 0.99%. The technology sector, particularly affected, faced a downgrade from UBS amid concerns over future growth and trade tensions exacerbated by new US tariffs.

On Thursday, the Chinese stock market experienced a decline for the second consecutive session, with the Shanghai Composite Index dropping by 0.39% to close at 3,359, and the Shenzhen Component Index falling by 0.99% to 10,736. This downturn was primarily influenced by negative performance in the technology and AI sectors, which have been under significant pressure recently.

UBS has recently downgraded China’s technology sector from an “attractive” to a “neutral” rating. This decision was attributed to a notable year-to-date gain exceeding 30% alongside rising concerns regarding the future growth potential of the sector. Analysts have signaled unease regarding China’s capacity to achieve its declared economic objectives, as highlighted during the recent Two Sessions annual meetings.

Furthermore, sentiment was adversely affected by growing trade tensions, particularly following the enforcement of steel and aluminum tariffs by United States President Donald Trump on Wednesday. The tech sector specifically saw considerable losses, with noteworthy declines recorded by firms such as Shanghai Stonehill (-6.8%), Talkweb Information (-1.2%), ZTE Corp (-4.2%), Inesa Intelligent Tech (-6.8%), and Cambricon Technologies (-4.1%).

The Chinese stock market continues to face challenges, as evidenced by its second consecutive day of declines, primarily driven by the technology sector. UBS’s downgrade of this sector reflects growing concerns about future growth. Moreover, external pressures from trade tariffs further contribute to the current market sentiment, raising questions about China’s ability to meet economic targets.

Original Source: www.tradingview.com

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