China stocks flat as AI gains offset consumer losses

SHANGHAI: China stocks were little changed on Wednesday as gains in AI supply-chain shares offset losses in consumer and financial stocks, while Hong Kong shares fell.

China’s blue-chip CSI300 Index edged up 0.1% by the lunch break, while the Shanghai Composite Index lost 0.2%. Hong Kong benchmark Hang Seng was down 0.4%. 

The 5G Communication Index rose 1%, leading gains onshore, while semiconductor shares climbed nearly 2%. In contrast, traditional sectors such as consumer staples and financials fell 1.4% and 0.7%, respectively.

The Coal Index dropped 1.2%. Asia-Pacific equities are likely to see a low-volume, risk-off tone on Wednesday, following a tech-led pullback on Wall Street and ahead of Fed Chair Kevin Warsh’s first speech, UBS analysts said in a note to clients.

In this year’s AI rally, Chinese and Hong Kong shares have often tracked US equities, especially for chip supply chain names.

Investors are also digesting remarks from top regulators at an annual forum in Shanghai.

China’s top banking regulator vowed on Wednesday to prevent systemic financial risk and channel resources to emerging industries, as the country undergoes a painful economic restructuring.

Official data released Tuesday showed China’s retail sales unexpectedly contracted in May for the first time in over three years.

The country’s central bank said that it would improve the mechanism for regulating short-term interest rates and promote the offshore yuan business in Shanghai.

Tech majors listed in Hong Kong were up 0.2%. ‑Reuters