China Stocks Dip Despite Service Sector Growth and Tech Gains

China stocks fell on Wednesday, led by declines in consumer and property shares, despite a surge in service activity. The CSI semiconductor index showed gains, but the broader Shanghai Composite and other key indices ended lower. Hong Kong's Hang Seng index also closed down, with mixed performances in various sectors.

China stocks closed down on Wednesday, dragged lower by consumer and property shares, despite an unexpected pickup in service activity in May. Hong Kong shares were also down.

China's services activity in May accelerated at the quickest pace in 10 months, while staffing levels expanded for the first time since January, a private sector survey showed on Wednesday, pointing to sustained recovery in the second quarter. Meanwhile, some Chinese AI chip companies are now designing less powerful processors to retain access to Taiwan Semiconductor Manufacturing Co production in the face of U.S. sanctions.

The CSI semiconductor index added 0.4%. ** At the close, the Shanghai Composite index was down 0.83% at 3,065.40. ** The blue-chip CSI300 index was down 0.58%, with its financial sector sub-index lower by 0.75%, the consumer staples sector down 1.11%, the real estate index down 2.55% and the healthcare sub-index up 0.2%. ** The smaller Shenzhen index ended down 1.19% and the start-up board ChiNext Composite index was weaker by 0.545%. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.96%, while Japan's Nikkei index closed down 0.89%. ** At 08:03, the yuan was quoted at 7.2458 per U.S. dollar, 0.08% weaker than the previous close of 7.2402. ** At the close of trade, the Hang Seng index was down 27.08 points or 0.15% at 18,505.56. The Hang Seng China Enterprises index fell 0.21% to 6,572.21. ** The sub-index of the Hang Seng tracking energy shares dipped 1.3%, while the IT sector rose 0.38%, the financial sector ended 0.1% lower and the property sector dipped 1.05%. ** The top gainer on the Hang Seng was Sunny Optical Technology Group Co Ltd, which rose 4.91%, while the biggest loser was Zhongsheng Group Holdings Ltd, which fell 7.42%.