The STAR 50 Index experienced a decline of up to 4.6% on October 9, 2026, bringing the total two-day drop to over 9%. This represents the most significant slide for the index since July.
The downturn primarily affects companies involved in artificial intelligence and semiconductors. Biwin Storage Technology and Moore Threads Technology saw their share prices fall by at least 40% during the third quarter of 2026.
Between April and July 2026, the Chinese tech sector grew by more than 70%. However, following peaks in late June, both the STAR 50 and ChiNext indexes declined by approximately 30% over the third quarter.
Market participants are reallocating capital toward defensive and cyclical sectors amid rising global yields and geopolitical tensions. Broader benchmarks, including the CSI 300 and Shanghai Composite, neared one-year lows on October 8 and 9.
Despite the recent correction, the STAR 50 Index continues to trade at approximately 100 times forward earnings. Investors remain concerned that global AI spending may not justify current valuation levels.
