China, HK stocks slip as AI shares retreat; energy bucks trend

SHANGHAI: Chinese and Hong Kong equities slipped on Tuesday, dragged by a pullback in AI and tech stocks, though energy shares rose on fears of an escalation in the Middle East conflict.

China’s blue-chip CSI300 Index dropped 0.8% by the lunch break and the Shanghai Composite Index lost 0.4%.

The Hong Kong benchmark Hang Seng was down 0.7%.

The CSI Artificial Intelligence Index fell 2.1% and the 5G Communication Index was down 1.8%.

Tech majors listed in Hong Kong were down 2%.

Chinese memory chip maker Changxin Technology eased 3.7%, giving back some of Monday’s 12% surge that had lifted the stock to an all-time high.

Analysts at Huaan Securities expect the AI supply chain to continue to gain momentum, with its strong performance likely to be validated during the mid-August earnings season.

Against the broad declines, oil and coal stocks rose as stalled talks to end the US-Iran war and fears of an imminent escalation sent oil prices higher.

PetroChina was up more than 2%.

Onshore consumer staples shares edged up 0.4%, despite data showing China’s economy lost momentum at the start of the second half, with industrial output and retail sales slowing as extreme weather disruptions and persistently weak domestic demand renew pressure on policy.

With several major consumer-sector firms reporting earnings this week, the results bear close monitoring for further clues on demand trends, UBS analysts said in a note.

The Robot Industry Index rose nearly 1%, with Leader Harmonious Drive Systems up 5.5%, ahead of humanoid-robot giant Unitree’s market debut on Wednesday.