HONG KONG: Hong Kong stocks slumped four-month lows on Thursday, while mainland blue chips edged closer to a technical bear market, as a selloff in tech shares and fading expectations for fresh stimulus to shore up China's economy dented investor sentiment.
In Hong Kong, the benchmark Hang Seng index tumbled 2.9%, while the city's tech shares dived 4.6%.
In the mainland market, the blue-chip CSI300 index lost 1.3% at the midday break, leaving it nearly 20% below its June peak. The benchmark Shanghai composite index dropped 0.9%.
The 20% threshold from a recent peak is widely defined as marking a technical bear market.
Market sentiment has been hurt by disappointment over Beijing's piecemeal stimulus measures, traders and analysts said, while stronger-than-expected third-quarter economic growth has further reduced expectations for additional policy support.
"China's limited stimulus measures announced ahead of the National Day holiday, including mortgage interest subsidies for first-time buyers of lower-priced properties, disappointed market expectations," said Kelly Chung, chief investment officer for multi assets at Value Partners.
"Investors have consequently largely priced out the possibility of further near-term stimulus."
China's economic growth bounced off three-year lows in the third quarter, as roaring exports offset consumers' tight grip on their wallets, though analysts warn the growing reliance on external drivers is deepening structural imbalances.
Beyond that, a drag from a global sell-off in AI-related stocks also contributed to weakness in the Chinese market.
"In the first half of 2026, both institutional funds and individual investors allocated most of their holdings to the technology sector, as reflected in the concentration of holdings in mutual funds' second-quarter reports," said Leo Wang, partner at Beijing-based Qianchuang Capital.
"This created a severe bubble in certain sectors and a serious drain on others."
The start-up board ChiNext Composite index tumbled 2.8% and Shanghai's tech-focused STAR50 index declined 1.6% at midday on Thursday.
In Hong Kong, Tencent Holdings slumped 3.4% and Alibaba dived 6%, leading the broader declines.
"Such a sharp and rapid decline is very rare, especially for a market leader like Tencent. This is likely the last of the panic selling, with the market selloff nearing its end," said Zeng Wenkai, chief investment officer at Hong Kong-based Shengqi Capital. "However, such painful wounds will take time to heal."