Chip stocks drag Chinese mainland shares as AI rout deepens; Hong Kong rises

SHANGHAI: Chinese stocks fell slightly on Wednesday as a rout in AI-linked names continued for a second day, with investors concerned about the payoff on their investments, prompting them to rotate into other sectors.

Hong Kong shares bucked the trend, buoyed by gains in internet platform companies.

China’s blue-chip CSI300 Index edged down 0.2% by the lunch break, while the Shanghai Composite Index lost 0.5%.

Hong Kong benchmark Hang Seng was up 1.4%.

Semiconductor stocks bore the brunt of the selling, with the CSI All Share Semiconductor Index tumbling 5.7%, while the tech-focused STAR50 Index dropped 4.2%.

The 5G communication Index fell 3.4%. The broad selloff came amid a more than 8% decline in South Korea’s chip-heavy KOSPI index after chipmaker SK Hynix’s bumper quarterly results fell short of lofty investor expectations.

However, shares in China’s memory chip giant CXMT bucked the trend, rising 3.7%.

The so-called traditional sectors like real estate and consumer staples, which have lagged tech companies so far this year, rose 3.2% and 1.8%, respectively.

Hong Kong-listed internet platform companies rose more than 2% on Wednesday, with the Hang Seng Tech Index extending its monthly gain to 10%, as investors rotated out of tech hardware stocks. Tencent and Alibaba shares rose 4% and 1.7%, respectively.

Adding to the pressure, the US administration on Tuesday unveiled bans targeting imports of new Chinese robots and power inverters, seeking to protect the US AI buildout from national security threats and reshore key industries slated for explosive growth.‑Reuters