China and Hong Kong stocks fall on tech losses, renewed Mideast tensions in focus
- In Hong Kong, the benchmark Hang Seng Index fell 1.1%
SHANGHAI: China and Hong Kong stocks dropped on Thursday, led by declines in tech shares tracking weakness in regional peers, while a fresh escalation in Middle East tensions also weighed on investor sentiment.
The United States launched new strikes against multiple targets overnight in Iran and President Donald Trump vowed even more attacks if no peace deal is secured.
By the midday break, the benchmark Shanghai Composite index was down 0.7%, while the blue-chip CSI300 index dropped 1.1%.
In Hong Kong, the benchmark Hang Seng Index fell 1.1%.
Tech shares dropped across the board, with China’s tech-focused STAR 50 falling 1.1%, Shenzhen’s startup board ChiNext declining 1.8%, and Hong Kong’s tech shares shedding 2%.
The decline followed weakness in regional peers, as MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1%, while Taiwanese shares and the Nikkei 225 also fell.
“We believe the rally in AI hardware could continue after the sharp correction due to the continued capex spending from major cloud service provider (CSPs) and solid fundamentals in earnings, but a more balanced approach on AI vs non-AI is warranted in the second half of this year,” analysts at HSBC Qianhai Securities said in a note.
Meanwhile, US consumer inflation increased at its fastest pace in three years in May, boosted by surging prices for energy products amid the Middle East conflict, and giving more ammunition to the Federal Reserve to keep interest rates unchanged into 2027.
Separately, market participants will shift their attention to China’s May credit lending data to gauge the health of the economy, following an unexpected contraction in new yuan loans in April. ‑Reuters
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