China, Hong Kong stocks edge lower as tech shares extend slide

HONG KONG: China and Hong Kong stocks inched lower on Tuesday, giving up opening gains as tech shares resumed their decline, while faster industrial profits growth failed to lift sediment.

By the midday break, the Shanghai Composite index was down 0.1% at 3,692.58 points.

The blue-chip CSI300 index was also down 0.1%.

The tech sector led declines, with the start-up board ChiNext Composite index weaker by 0.5% and Shanghai’s tech-focused STAR50 index down 1.5%.

The selloff in Chinese AI-related shares continued, with the CSI Semiconductor Index down 2.2% at a fresh six-month low and the CSI AI Index down 0.8%.

In a sign of risk sentiment remaining fragile, the defensive CSI Banks Index added 0.8%.

In Hong Kong, the benchmark Hang Seng Index was down 0.1%, and the Hang Seng Tech Index declined 0.8%.

“The market may stage a short-term rebound after the recent selloff, but a more sustained recovery could require further de-leveraging over the medium term as some crowded positions have yet to be fully cleared,” analysts at Sinolink Securities said in a note.

China’s central bank said on Monday it had decided to establish a swap facility to provide emergency liquidity to non-bank financial institutions facing large-scale redemptions.

“The establishment of such facilities to address large redemptions at non-bank financial institutions could keep short-term liquidity conditions accommodative,” Huajin Securities analysts said in a note.

Elsewhere, data released on Tuesday showed China’s industrial profits grew at a faster pace in September but the sectoral divide remained pronounced.

Around the region, Asian stocks climbed on Tuesday as AI firm Anthropic’s eagerly anticipated IPO filing lifted risk appetite ahead of tech earnings that will be a test for the AI trade, and central bank meetings that will influence near-term interest rates.