China's CSI 300 falls nearly 2%, nears bear market
Key Facts
China's CSI 300 index fell nearly 2% during trading on October 22, approaching a technical bear market, according to Reuters, in a session that saw Asian equities decline amid concerns over artificial intelligence spending and risks to oil supplies. The agency described the index as "on the brink of a technical bear market," with selling persisting despite China's economic growth accelerating in the third quarter and beating analysts' forecasts. Across the region, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.8% during the same session. That took the regional benchmark to its lowest level in about 3 months, according to the Reuters report, extending losses beyond the Chinese market. In oil markets, Brent crude reached $111.03 a barrel as risks of a widening conflict in the Middle East increased. Reuters linked oil's move to concerns over supply disruptions, while worries about the cost of technology investment returned to the forefront of equity trading.
Reuters said U.S. corporate earnings failed to dispel concerns over "rising costs of investment in artificial intelligence," despite positive results reported by Wall Street companies. Those concerns resurfaced with Meta's plan to issue Class C shares carrying no voting rights, according to the agency. The plan brought growing AI spending commitments back into investors' focus, alongside corporate results that proved insufficient to ease concerns about those costs. Chinese equities had underperformed other Asian markets before the latest selloff, according to a comparison published by Investing.com on October 10, citing Yardeni Research. The report said the CSI 300 had lost about 6% from the start of the year through the period it covered, while South Korea's Kospi and Taiwan's weighted index had each gained more than 65%. That comparison highlighted the Chinese benchmark's losses alongside large gains in the South Korean and Taiwanese markets, before AI spending concerns returned to regional trading on October 22.
The decline in Chinese equities followed the announcement of faster economic growth, with gross domestic product expanding 4.5% year on year in the third quarter, according to a Reuters report on data released on October 19. The reading exceeded the Reuters poll forecast of 4.4% growth and was up from the second quarter's 4.3% pace. The economy thus improved from the previous quarter, while the latest data continued to show divergent performances across industry, consumption and investment. China's National Bureau of Statistics said value-added output at industrial enterprises above a designated size rose 5.5% year on year in September. Retail sales of consumer goods increased 1.1% year on year in the same month, according to the bureau. Retail sales growth remained slower than growth in industrial value-added output, against an economic backdrop of accelerating GDP and contracting investment.
On investment, China's fixed-asset investment fell 7.2% year on year during January-September, according to Reuters, compared with expectations for a 7.3% decline. The rate of contraction was unchanged from January-August, leaving the reading for the first nine months better than expected while investment remained below its year-earlier level. The decline was steeper in property development, where the National Bureau of Statistics reported a 20.6% year-on-year drop in investment during the first nine months. That property contraction accompanied the decline in fixed-asset investment, while industry and retail sales grew in September and GDP accelerated in the third quarter. On the upcoming calendar, the Federal Reserve's Federal Open Market Committee meets on October 27 and 28, according to the U.S. central bank's official 2026 meeting schedule.