Chinese stocks flat as tech drags, investors seek defensive plays

HONG KONG: China shares were flat on Thursday as investors rotated into defensive sectors amid concerns over artificial intelligence spending and regional tensions, while tech and property stocks weighed on sentiment.

• As of the midday trading break, the benchmark Shanghai Composite Index added 0.2% to 3,876.40.
• The blue-chip CSI300 Index dropped 0.6%.
• In Hong Kong, the benchmark Hang Seng Index weakened 0.4%.
• The Hang Seng Tech Index lost 1.3%, bringing the loss since the October peak to roughly 20%.
• Leading gains onshore, China’s CSI Defense Index rose more than 2% to a two-month high, after the US approved an $11.1 billion arms package for Taiwan, the largest ever.
• The CSI Banks Index added 1% and the energy sector index jumped 0.8% as investors piled into defensive plays.
• The financials sector climbed 0.2%, with broker CICC surging by the daily limit of 10% after it unveiled plans on Wednesday to buy two smaller rivals in a share-swap deal worth about $16 billion.
• Among the laggards, the CSI AI Index lost 1.4% and the semiconductor sector lost 1.1%, after jitters over AI funding dragged tech stocks on Wall Street overnight.
• The CSI 300 Real Estate Index lost 1.4% as developer Vanke’s debt crisis continued.
• “We continue to expect the market to remain volatile at elevated levels, and a clearer signal of sustained upside is still needed,” analysts at Huaan Securities said in a note.
• “January following a strong year tends to see heightened swings, suggesting short-term risks of a pullback remain,” they added.
• Broader in the region, shares fell as the tech sector took a beating on renewed angst about AI spending, while investors braced for a wave of central bank meetings set to underscore policy divergence worldwide.‑Reuters