SHANGHAI: Mainland China stocks fell on Thursday, weighed down by weakness in tech shares following a selloff in regional peers, although fading expectations of a US rate hike capped declines.
Hong Kong stocks rose on the day, boosted by Alibaba shares.
At the close, the benchmark Shanghai Composite index was down 1.9 percent, its weakest closing since April 3. The blue-chip CSI300 index also dropped 1.9 percent.
China’s tech-focused STAR50 index plunged 4 percent, and the start-up board CHINEXT plummeted 3 percent.
Semiconductor shares were among the biggest losers, with the sub-index slumping 6 percent. Chinese chip designer Cambricon Technologies closed down 5.1 percent.
The weakness tracked losses in other Asian chipmakers, with South Korea’s SK Hynix tumbling more than 11 percent and rival Samsung Electronics falling nearly 9 percent.
There are growth opportunities in mainland China “in pharma and energy storage, and value in property developers, banks and Internet. From an earnings angle, we believe 2026 should beat last year,” said Herald van der Linde, head of equity strategy for Asia Pacific at HSBC.
In Hong Kong, the benchmark Hang Seng Index rose 1.3 percent, while the city’s tech shares jumped 2 percent.
Alibaba led gains, ending 3.1 percent higher, after the company said in a statement to Reuters that its Qwen model will be integrated into Apple Intelligence across Apple’s iPhone (iOS), iPad (iPadOS), Mac (macOS) and Vision Pro (visionOS) operating systems in China.
Chinese President Xi Jinping is expected to outline a vision for the country’s role in global AI governance on Friday, as Huawei showcases its most advanced AI computing cluster yet in a sign of Beijing’s drive to build a domestic alternative to US technology.
Separately, investors are turning their focus to the upcoming Politburo meeting, where policymakers are expected to set the economic policy agenda for the second half of the year.
Markets, however, largely view the recent softer-than-expected second-quarter economic data as insufficient to prompt broad-based policy easing.
“We maintain our baseline forecast of no policy rate or reserve requirement ratio (RRR) cuts through the remainder of 2026, though the probability could rise if growth slows further,” said Lisheng Wang, economist at Goldman Sachs.