Asian Stocks Recover Losses as AI-Related Selloff Subsides

The CSI AI Index dropped 0.3 percent after touching a six-month low, and the CSI Semiconductor Index gained 0.5 percent, having lost more than 30 percent from July peaks. Market heavyweight CXMT fell up to 5.3 percent to the lowest level since July despite reports of progress on its memory-chip design before closing nearly 3 percent down. Analysts at Sinolink Securities said investors’ concerns about the fundamentals of these tech shares are not fully priced in, even after the recent sharp correction.

The AI rally is also cooling in the US, which will make it harder for Chinese tech shares to rebound in the near term, the analysts said. New energy vehicle stocks dropped after Beijing said it would lower the value-added tax export rebate from April, amid a deal with the European Union that could cut Chinese exports of hybrid cars to the bloc by more than half.

Other main Asian markets fell sharply on Tuesday as investors fretted about the durability of the rally in AI shares and increased competition.