Published on 07/17/2026 at 12:56 am EDT
(Reuters) - China stocks tumbled on Friday, on track for their biggest weekly drop in 2-1/2 years, as chipmaker CXMT 's $8.6 billion initial public offering stirs fears that a slew of upcoming domestic mega-IPOs will sap liquidity in a market already creaking under stretched valuations of AI-related stocks.
** Hong Kong shares also swooned, led by tech shares, with sentiment soured by the renewed Iran war.
** " CXMT is sucking in too much money, and investors are voting with their feet," said Stephen Huang, a Shanghai-based hedge fund manager. "For tech stocks, it's a disaster."
** China's large-cap index CSI300 was down 2.5% by the lunch break, hitting a three-month low. The Shanghai Composite Index declined 1.6%.
** Both indexes are heading for the worst weekly performance since late December, 2024.
** Hong Hong's Hang Seng Index lost 2%, the biggest drop in nearly four months.
** Investor caution was reflected in the subscriptions for newly-issued shares of Chinese memory chip giant CXMT .
** Retail subscriptions exceeded the CXMT shares available by more than 200 times, but the over-subscription rate of Asia's biggest IPO so far this year was much lower than most Chinese IPOs.
** Wu Zhou, fund manager at Shenzhen Deyuan Investment Co, said many stocks that could benefit from CXMT IPO-funded expansion had soared ahead of its IPO, and now, investors are pocketing the gains.
** Sell-off was savage in China tech stocks, as investors eye a slew of upcoming mega-IPOs by companies such as robot maker Unitree and chip-making giant Yangtze Memory Technologies, potentially stretching market liquidity.
** The CSI AI Index and the CSI Integrated Circuits Index slumped 6%. The

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Chip Index retreated 5%.
** In an apparent effort to pacify the market, the official Shanghai Securities Journal argued in an article on Friday that mega IPOs do not change the market's direction.
** "Liquidity in China's market is ample," the newspaper said. "There's no need to worry too much about CXMT 's IPO."
** In Hong Kong, AI, biotech and chipmaking stocks were among the biggest decliners.
(Reporting by Shanghai Newsroom; Editing by Rashmi Aich)

Sumber : Reuters