China’s STAR50 falls 40%, erasing about $480 billion

China’s STAR50 index has fallen about 40% from its July peak in less than four months, erasing roughly $480 billion in market value as shares tied to artificial intelligence and semiconductors retreat. The decline has also weighed on the broader market and raised questions about the durability of the rally that preceded it. The CSI 300, a benchmark for blue-chip stocks, is about 20% below its June high, according to reported market data. Traders cited expensive valuations, tax bills and concerns that the United States or other countries could restrict Chinese equipment used in data centers. The reports identified no single clear trigger for the selloff, and those factors remain explanations cited by traders rather than confirmed causes. AI-related stocks account for an estimated 42% of the market capitalization of Chinese A- and H-shares and 57% of turnover, according to Goldman Sachs. The concentration helps explain why the retreat has affected a substantial part of the market, though individual companies have experienced different declines. The STAR50 still trades at around 100 times trailing earnings, down from nearly 250 times at its peak. By comparison, the Nasdaq 100...