A significant downturn is being observed in exchange-traded funds tracking the STAR 50 Index.

As of the latest update, the CSOP STAR 50 ETF (03109) has plummeted by 10.66% to HK$19.1, the PineBridge STAR 50 ETF (03151) has dropped 10.44% to HK$13.9, and the Bosera STAR 50 ETF (02832) has declined 9.96% to HK$14.29.

The STAR 50 Index itself experienced a sharp intraday fall of over 8% on July 2nd.

This movement follows a substantial overnight sell-off in the overseas semiconductor sector, with the Philadelphia Semiconductor Index dropping more than 6%. Key industry leaders including Micron, Intel, ASML, and AMD led the decline.

Analysis suggests the core reason for this overseas sell-off may be a loosening in the crowded trade within the AI hardware sector. There is growing market apprehension that previous enthusiasm for AI-related stocks was excessively high, prompting a collective shift towards risk-off positioning and portfolio reduction. Stocks that previously benefited from the AI narrative are now facing the brunt of the selling pressure.

By July 2nd, the semiconductor and computing hardware sectors were among the worst performers.

Adding to the cautious sentiment, Cambricon Technologies recently issued a stock trading risk warning, alerting investors to the significant stock price appreciation and valuation levels that have notably deviated from the industry average.