SHANGHAI: China and Hong Kong stocks ended lower 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.
At the market close, the benchmark Shanghai Composite index declined 0.2 percent, while the blue-chip CSI300 index dropped 0.6 percent.
In Hong Kong, the benchmark Hang Seng Index fell 0.7 percent, marking a seventh straight losing session and its longest losing streak since October.
Tech shares dropped across the board, with Shenzhen’s startup board ChiNext sliding 1.1 percent, and Hong Kong’s tech shares shedding 1.5 percent.
The decline followed weakness in regional peers, as MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent.
Analysts at HSBC Qianhai Securities said in a note that the rally in AI hardware stocks could resume amid continued capex spending from major cloud service providers and solid earnings fundamentals, “but a more balanced approach on AI vs non-AI is warranted in the second half of this year”.
Hong Kong shares of e-commerce giant Alibaba fell 5.4 percent to their lowest closing price since July 2025, after reports about its Dingtalk CEO Chen Hang’s departure following debates about AI focus.
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 the Federal Reserve more reason to maintain a hawkish tilt into 2027.
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