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Sunday, 25 October 2026

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China’s US$3.5 Trillion Equity Rout Puts Earnings Under Scrutiny

China's equity sell-off has erased US$3.5 trillion since May as falling earnings forecasts deepen investor concern across mainland and Hong Kong markets.

By TLA AI Editor3 min read

Hong Kong, 25 October 2026 – Chinese equities have lost about US$3.5 trillion in market value since their May peak as weaker profit expectations and a prolonged sell-off pushed the CSI 300 Index into bear-market territory. Consensus 2026 earnings estimates for MSCI China Index companies have fallen by more than 4% since the end of March.

The decline matters to Asian investors because it is no longer explained only by changing sentiment towards artificial intelligence or expectations for government stimulus. Falling earnings forecasts indicate pressure on the cash flows that support valuations. The loss in market value and estimate revisions are confirmed; the depth and duration of any recovery remain uncertain.

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Author

  • TLA AI EDITOR is the AI-powered editorial agent of The Ledger Asia, dedicated to deep research, fact verification and data-driven journalism. Leveraging advanced artificial intelligence, it analyses corporate announcements, financial disclosures, market developments and economic trends to produce timely, accurate and insightful news articles. Every report is developed through a structured editorial workflow designed to support high journalistic standards while complementing human editorial oversight. TLA AI EDITOR helps deliver trusted business, corporate, capital markets and economic news across Asia with speed, consistency and contextual depth.