Chinese markets fall as technology stocks come under pressure

Chinese equity markets ended lower on Monday, with both the Shanghai and Shenzhen benchmarks retreating from recent highs amid weakness in technology stocks and negative cues from Wall Street.

The Shanghai Composite fell 1.37% to close at 4,106, while the Shenzhen Component Index dropped 3.17% to 15,854. The decline came after both indices had recently touched a one-month high and, in the case of Shenzhen, an over 11-year peak.

Investor sentiment was weighed down by losses in global technology stocks, as concerns grew that the sector?s prolonged rally may have become overextended. Chinese technology shares also witnessed broad-based selling, with Zhongji Innolight falling 5.23%, Eoptolink Technology declining 4.82%, and Victory Giant Technology dropping 7.44%.

In contrast, financial stocks outperformed the broader market. Shares of Industrial and Commercial Bank of China gained 2.5%, while Agricultural Bank of China rose 2.66%.

On the economic front, data showed that China?s cumulative fiscal deficit narrowed for the first time in more than two years. The combined deficit across the country?s two main government budgets stood at 3.16 trillion yuan during January?May, despite continued weakness in domestic demand and slower economic growth.

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