China stocks close at one-year low as AI hardware rout deepens

SHANGHAI, Oct 14 (Reuters) - Chinese stocks ended on Wednesday at their lowest level in more than a year as a selloff in AI-related supply chain shares deepened and as investors digested mixed domestic inflation data.

** The CSI300 Index .CSI300 closed 1.4% down, hitting its lowest level since August 2025 in late trade, while the Shanghai Composite Index .SSEC fell 0.9%. Hong Kong's benchmark Hang Seng .HSI edged down 0.1%.

** Chinese producer prices rose at their fastest pace in more than four years in September, while consumer inflation came in below expectations. Pricier oil and commodities lifted factory-gate costs even as weak domestic demand kept broader price pressures contained.

** Energy-related stocks rose as oil prices climbed on Saudi supply risk. The Coal Index .CSI000820 was up 1.1%, while the CSI Energy Index .CSIEN climbed nearly 2%.

** Consumer staple shares .CSICS gained 0.3%.

** Meanwhile, sentiment towards AI supply chain shares turned more negative in the afternoon session. The 5G Communication Index .CSI931079 fell 3.8%. The tech-focused STAR50 Index .STAR50 was down 3.3%.

** Zhongji Innolight 300308.SZ, a leading maker of optical transceivers used in AI data centres, slumped 5.7%.

** China's stock benchmarks are near levels hit two years ago when a stimulus bonanza from Beijing lit up share prices and boosted hopes for a slow bull run, which is now limping into a three-month downtrend.

** HSBC analysts cut their end-2026 targets for the Shanghai Composite, CSI300 and Shenzhen Composite indexes by 9% to 15%, to 4,100, 4,800 and 14,500 respectively, implying upside of 8% to 15% from current levels.

** Value stocks have outperformed growth since July, but HSBC said the trend could prove temporary, citing growth stocks' lower valuations and stronger earnings-revision momentum.

** Tech majors in Hong Kong .HSTECH rebounded and were up 0.9%. Still, the index was hovering near a two-year low.