(Bloomberg) — Chinese shares touched a one-year low, led by a selloff in technology firms after a report that authorities may allow purchases of Nvidia Corp.’s new chips and proposed US sanctions on foreign optical producers.
The onshore benchmark CSI 300 Index dropped as much as 2.4% on Monday. Chipmakers Cambricon Technologies Corp. and GigaDevice Semiconductor Inc., as well as optical companies Zhongji Innolight Co. and Eoptolink Technology Inc., were among the top decliners, down at least 5% each.
Mainland Chinese markets were closed on Friday for a public holiday.
Investor mood soured after The Information reported that Beijing signaled it may let local firms buy Nvidia’s new semiconductors, a development that may further threaten homegrown chipmakers amid already intense domestic competition. Adding to the weakness was a Friday move by four US senators to introduce legislation that named Innolight and Eoptolink as restricted vendors for government procurement.
“The direct earnings impact is limited, but it shows that tech restrictions are running on a separate track to diplomacy,” Billy Leung, an investment strategist at Global X Management, referring to the proposed sanctions on the two Chinese optical firms. He added that the two-month US-China trade truce reached at last week’s summit “fell short of hopes.”
The closely watched gathering between US President Donald Trump and his Chinese counterpart Xi Jinping yielded few surprises for markets, including expected tariff relief on about $30 billion of products as well as a decision to extend the trade ceasefire until January.
–With assistance from Winnie Hsu.
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