China stocks flat as defensive plays offset tech weakness
- At the midday break, the Shanghai Composite index was up 0.03% at 3,987.56 points
HONG KONG: China stocks were largely unchanged on Tuesday, as gains in defensive sectors helped offset weakness in technology shares amid a lack of catalysts.
At the midday break, the Shanghai Composite index was up 0.03% at 3,987.56 points. China’s blue-chip CSI300 index was down 0.06%.
Tech shares weighed on the market, with the start-up board ChiNext Composite Index falling 0.9% and Shanghai’s tech-focused STAR50 Index down 1.5%.
The CSI Semiconductor Index slid 2%.
Defensive sectors, however, gained, cushioning the broader market.
The CSI Liquor Index gained 2.7% by the midday break, while the consumer staples sector strengthened 1.6%.
The banking sector also climbed, with the CSI Banks Index up 1.1%.
“Sentiment is expected to stay cautious, and trading is likely to remain range-bound,” analysts at Hwabao Securities said in a note.
Markets have entered an earnings lull and are awaiting confirmation of the Chinese and US leaders’ meeting schedule, while Federal Reserve Chair Kevin Warsh’s hawkish turn last week has also left investors reassessing the interest-rate outlook, they added.
“Given that the economy remains in a modest-recovery phase, market leadership is likely to continue following a ‘barbell’ allocation approach.”
In Hong Kong, the benchmark Hang Seng Index was down 1% at 25,310.88, and the Hang Seng Tech Index declined 0.8%.
Shares in online fast-fashion retailer Shein fell 8% in their debut on Tuesday, with investors worried about the impact of setbacks that long delayed its listing and have undermined its competitive advantages.
Around the region, stock markets were under pressure as selling drove global bond yields to major new highs on Tuesday, while renewed fighting in the Middle East lifted oil prices above $90 a barrel.
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