China and Hong Kong stocks fall as investors weigh Nvidia CEO scandal

what happened

According to Reuters, Chinese shares snapped a three-day rally on Thursday while Hong Kong stocks declined, as investors assessed the possible fallout from a scandal involving Jensen Huang, chief executive of US chipmaker Nvidia.

The CSI 300 closed 0.8% lower and the Shanghai Composite lost 0.7%. The Hang Seng fell 1.3% and the Hang Seng Tech dropped 2.4%. Alibaba slumped 7%, its steepest daily loss since August, as worries grew that US authorities could tighten cloud operators' access to advanced chips.

Against the broader trend, mainland chip suppliers rallied: Moore Threads, MetaX and Cambricon each rose more than 8%, as the Nvidia episode boosted hopes for domestic substitution. Z.AI and Minimax fell 9% and 8%, and CK Hutchison lost 4% after reportedly pausing a planned dual listing of AS Watson Group.

why it matters

Larry Hu, chief China economist at Macquarie, called the performance of Chinese equities this year disappointing, mainly due to limited stimulus for domestic demand. He said export strength going into 2027 will determine how much support Beijing provides to meet its GDP growth target, which will in turn drive equity performance.

market impact

China and HK equities: pressure from the Nvidia scandal and possible US chip curbs; Chinese chip makers gain.

• ▼Alibaba shares pressure down — concern over possible tighter US limits on cloud operators' access to advanced chips
• ▼Hang Seng Tech index pressure down — investor caution over the potential fallout from the Nvidia scandal
• ▲Chinese chip maker shares pressure up — expectations of faster domestic chip substitution after the Nvidia scandal

instruments