Global Market: China stocks mixed, Hong Kong shares edge higher as AI weakness weighs

China stocks traded mixed on Monday, while Hong Kong shares edged higher as declines in artificial intelligence and semiconductor stocks offset gains in defensive sectors. Investors remained cautious ahead of key interest-rate decisions by major global central banks, Reuters reported.

At the midday break, the Shanghai Composite was up 0.2% at 3,894.28 points, while the blue-chip CSI300 index declined 0.3%.

Technology stocks led the declines in mainland China. The ChiNext Composite fell 0.5%, while Shanghai's technology-focused STAR50 index dropped 0.9%. The CSI AI Index declined 1.2%, and the CSI Semiconductor Index weakened 0.7%.


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Defensive Stocks Provide Some Support
Losses in technology shares were partly offset by gains in defensive sectors. China's banking sector rose 0.5% as investors sought relatively stable areas amid heightened uncertainty in global markets.

Analysts at Guotai Haitong Securities said investors were becoming more cautious about taking risks as the global backdrop remained complex. The brokerage expects Chinese equities to remain range-bound unless there is clearer evidence of an improvement in corporate fundamentals and market liquidity.

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Hong Kong Shares Gain Despite AI Weakness
In Hong Kong, the benchmark Hang Seng Index rose 0.4%, while the Hang Seng Tech Index added 0.2%.

However, artificial intelligence stocks came under pressure. The Hang Seng AI Index fell 2.4%, with Z.AI shares tumbling as much as 10.5% to their lowest level in five months following a discounted share placement. Rival Minimax declined 5.6% by the midday trading break.

The weakness in AI-related stocks highlighted growing investor caution toward high-growth technology shares after their strong gains.

Global Rate Decisions in Focus
Investors across Asia were also keeping a close watch on developments in global monetary policy. Asian equities broadly declined on Monday as renewed concerns over oil supplies pushed crude prices higher.

Markets are preparing for potentially important interest-rate decisions from the U.S. Federal Reserve and the Bank of Japan later this week. Higher energy prices could add to inflation concerns and complicate the outlook for monetary policy.

The combination of elevated oil prices, uncertainty over interest rates and weaker sentiment toward technology stocks is likely to keep investors cautious across Asian markets in the near term, Reuters reported.