2026.06.2602:16:22UTC+00China Stocks Retreat on Tech Selloff

The Shanghai Composite fell 1.1% to 4,076 on Friday, while the Shenzhen Component dropped 1.6% to 16,093, as heavy selling in technology shares erased the prior session’s gains in both benchmarks. A recent rally, fueled by strong earnings and an upbeat revenue outlook from Micron Technology, quickly lost momentum amid mounting investor concern over the substantial costs and uncertain payoff of AI-related investments.

Among notable Chinese tech laggards were Zhongji Innolight (-5.4%), Eoptolink Technology (-6.2%), Victory Giant Technology (-5.8%), and Hygon Information Technology (-2.7%).

On the macroeconomic front, China’s fiscal spending increased 0.8% year-on-year to CNY 11.39 trillion ($1.59 trillion) in the first five months of 2026. Central government expenditure rose 6.5% to CNY 1.68 trillion, while local government spending edged down 0.1% to CNY 9.71 trillion.

For the week, the Shanghai Composite was on track for modest losses, whereas the Shenzhen Component was poised to notch a second consecutive weekly gain.