Mainland and Hong Kong stocks tumbled on Friday after a sharp drop in gold prices sparked a broad-based selloff across the markets and state media warned against speculative trading.

In Hong Kong, the benchmark Hang Seng Index ended down 580 points, or 2.08 percent, at 27,387.

The China enterprises index was down 235 points, or 2.47 percent, at 9,317 while the tech index was down almost 123 points, or 2.1 percent, at 5,718.

The Hang Seng Materials index tumbled 9.1 percent, the biggest single-day gain since April 2025.

Shares ⁠of Zijin Mining dropped 9.2 percent.

The benchmark Shanghai Composite Index ended down 40 points, or 0.96 percent, at 4,117, after losing up to 2.2 percent earlier in the day.

Despite the drop, it has gained 3.8 percent in January, its best monthly gain since August.

The Shenzhen Component Index was 94 points, or 0.66 percent, lower at 14,205.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was up just over 41 points, or 1.27 percent, at 3,346.

The Star Composite Index, which reflects the performance of stocks on China's sci-tech innovation board, closed 0.08 percent higher at 1,832 while the Star 50 Index, which tracks the largest stocks listed on the board that also meet certain liquidity requirements, was 0.12 percent up at 1,509.

Turnover on the main Shanghai and Shenzhen indexes amounted to 2.84 trillion yuan, down from 3.23 trillion yuan on Thursday.

Stocks related to textile machinery, agriculture and papermaking led gains while shares in the non-ferrous metal and oil sectors suffered major losses.

Losses were spread across the board on Friday, with gold-related shares seeing the biggest selloff after a sudden retreat in bullion prices from record highs.

Sentiment was further dented after the state-owned Securities Times warned against the rally, while regulators including the Shanghai Gold Exchange announced new measures such as raising margin requirements to curb speculation.

"The regulatory authorities' timely intervention is aimed at preventing potential risks from an overheated market," the newspaper wrote.

"For ordinary investors, it's better to view it rationally rather than blindly chasing higher prices."

The CSI SSH Gold Equity Index tumbled 8.8 percent, and the CSI SWS non-ferrous metal index lost roughly 8.2 percent.

Miner Chifeng Gold, Shandong Gold and Zhongji Gold all plunged by their daily trading limit of 10 percent.

Among other losers, the rare earth index lost 5.7 percent and the liquor distillers weakened four percent.

The property sector weakened 3.4 percent, paring the sharp rally on Thursday after China reportedly dropped the borrowing limits on developers known as its "three red lines" policy. (Reuters/Xinhua)