Chinese equities underwent a volatile correction on Wednesday. By the market close, the Shanghai Composite Index had fallen nearly 0.6%, the Shenzhen Component Index declined 0.27%, and the ChiNext Index dropped 0.83%.

Sector performance was mixed. The semiconductor sector continued its strong performance, with stocks like Zhongchuan Special Gas and Demingli hitting the daily limit-up. The glass substrate concept was active, with BOE Technology Group A-shares also reaching limit-up. The PCB (Printed Circuit Board) concept saw a rebound, with Shihyun Circuit hitting limit-up. The coal sector strengthened, with Dayou Energy securing its fourth consecutive limit-up session. Conversely, retail stocks weakened, with Central Emporium and Zhongbai Group falling to the daily limit-down. Other gainers included storage chips, industrial gases, supercapacitors, and lithography machine sectors. Sectors such as non-ferrous metals, aquaculture, and baijiu (Chinese spirits) were among the decliners.

Across the broader market, declining stocks significantly outnumbered gainers, with over 4,100 individual stocks closing lower.

In cryptocurrency markets, Bitcoin experienced a sharp decline, briefly falling below the $62,000 mark with a maximum intraday drop exceeding 8%. Other major cryptocurrencies also fell across the board, with Ethereum, Dogecoin, and XRP all dropping over 4%, and Solana declining more than 5%.

Data from CoinGlass indicates that over the past 24 hours, more than 270,000 traders in the cryptocurrency market were liquidated, with the total liquidation value surpassing $1.6 billion.

Market sentiment was influenced by expectations of a more hawkish Federal Reserve. A recent economic report from the U.S. central bank, known as the Beige Book, highlighted that despite continued investment enthusiasm in artificial intelligence (AI), the U.S. economy is showing signs of strained consumer spending, weak hiring, and persistent price increases. The report noted that energy costs related to Middle East conflicts are a primary factor driving inflation higher, with spillover effects into shipping, packaging, groceries, and fertilizer sectors.