SHANGHAI: China and Hong Kong stocks declined on Tuesday, ending a three-session rally, as investor enthusiasm for artificial intelligence and chip stocks cooled, while traders weighed US President Donald Trump’s latest tariffs.
China’s blue-chip CSI 300 Index ended 0.5% lower, while the Shanghai Composite Index slipped 0.1%. Hong Kong benchmark Hang Seng was down 1.1%.
AI stocks slid 0.6%, following a 12% surge since the market reopened after the Chinese New Year holidays, driven by the momentum from startup DeepSeek.
Hong Kong-listed tech majors dropped 2.7%, also snapping three consecutive sessions of gains.
Semiconductor shares fell 1.1% after Trump raised tariffs on steel and aluminium imports to 25% on Monday, and said that he would also announce on reciprocal tariffs against all countries imposing duties on US goods over the next two days.
He also mentioned considering tariffs on cars, semiconductor chips, and pharmaceuticals.
Shares in Chinese automakers Xpeng and Geely Auto tumbled 9.0% and 10.2%, respectively, on worries that they will struggle to compete against BYD’s move to offer smart driving features across almost all of its line-up for free. BYD shares were roughly flat.
After the DeepSeek surprise during the Chinese New Year holidays, intelligence initiatives will likely remain a key theme among auto stocks, UBS analyst Paul Gong said.
In the longer term, Gong sees Chinese carmakers taking the lead globally on intelligence innovation, democratising these technologies in mass-market cars.
Chinese battery giant CATL plans to file a Hong Kong listing application this week to raise at least $5 billion, according to two sources. Its shares fell 2.6%.
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