The mainland's blue-chip index dropped more than two percent to a one-year low on Monday as optimism over the US-China summit faded, leaving investors focused on deepening economic imbalances and geopolitical risks.

In Hong Kong, the benchmark Hang Seng Index ended 132 points, or 0.5 percent, to 24,642 on turnover of HK$177.48 billion.

The tech index lost 15 points, or 0.4 percent, to 4,296 while the China enterprises index gained 51 points, or 0.6 percent, to 8,216.

On the mainland, the benchmark Shanghai Composite Index ended down 64 points, or 1.67 percent, to 3,823.

The Shenzhen Component Index plunged 458 points, or 3.44 percent, to 12,858 while the ChiNext Index dived 149 points, or 4.53 percent, to 3,139.

The technology slump came after US lawmakers moved towards restricting the use of Chinese-made components used in AI data centres, dampening an already thin risk appetite ahead of a week-long holiday from October 1.

The large-cap CSI300 Index ended the session 2.2 percent lower, its biggest loss in five weeks and touching its lowest point since August 2025.

China and the United States said they had agreed to reduce tariffs on US$30 billion of goods in each direction, and launch a dialogue on AI, following a meeting between President Xi Jinping and his US counterpart, Donald Trump, in Washington.

Despite the optics of the summit, "the US and China remain divided across technology, security, trade and the broader architecture of international governance," OCBC Bank said in a note.

Reflecting such divisions, US lawmakers introduced legislation on Friday to bar the federal government from equipping sensitive government systems with Chinese-made components used to transmit data in AI data centres.

It weighed on Chinese optical transceiver makers Eoptolink Technology and Innolight Technology, both of which were named explicitly by the US senators.

Eoptolink tumbled eight percent in Shenzhen while Innolight slumped nine percent and 12 percent, respectively, in Shenzhen and Hong Kong.

China's CSI 300 Telecommunication Services Index slumped more than six percent to a two-month low.

Chinese chipmakers slumped after news that China could allow some domestic companies like ByteDance and Alibaba to buy Nvidia's chip built for high-end professional computers.

Besides the ChiNext, the tech-focused Star Market and the small-cap CSI3000 Index each fell roughly four percent.

China's industrial profit growth slowed in August, highlighting deepening economic imbalances.

Xiangcai Securities said in a note that "risk aversion mood is permeating ahead of the long holiday".

In Tokyo, the Nikkei snapped a five-day winning streak to close 486 points, or 0.73 percent, lower at 65,877 as Nasdaq futures weakened ahead of US memory maker Micron Technology's earnings report later in ⁠the week.

The broader Topix slipped 16 points, or 0.4 percent, to 4,112.

In Seoul, the Kospi fell 191 points, or 2.7 percent, to 6,889 in catch-up trading, following a holiday break that preceded four sessions of gains, as chipmakers dropped due to worries over high bond yields. (Xinhua/Reuters)




Edited by Tony Sabine