China, HK stocks track Asia lower on Mideast, inflation concerns

** First-quarter 2026 earnings from internet giants reported over the past week ⁠have bolstered confidence in a valuation re-rating for the MSCI China Index, prompting an ⁠upgrade of ⁠the consumer discretionary sector to "neutral" from "underweight", JP Morgan said in a note.

China and ​Hong Kong stocks ended lower on ​Wednesday, tracking broad declines ‌across Asia onprolonged ​Middle East tensions and inflation concerns.

** China's blue-chip CSI300 Index closed 0.04% lower, while the Shanghai ‌Composite Index lost 0.2%. Hong Kong's benchmark Hang Seng was down 0.6%. ** The CSI New Energy Index rose 1.1% as stalled U.S.-Iran talks kept oil prices elevated.

** President ‌Donald Trump said the United States may need to strike Iran again ‌but suggested Iran wants a deal to end the war that has roiled markets and sent energy prices soaring. ** Semiconductor shares rallied 4.6%, helping trim benchmark losses, with Hua Hong ⁠Semiconductor surging 19% ​after Yangtze Memory ⁠Technologies, the country's top flash memory chip maker, submitted its IPO tutoring registration report, marking the ⁠official start of its onshore listing process.

** Onshore financial and property shares fell 0.9% and ​2%, respectively. ** Tech majors listed in Hong Kong were up 0.3%, but ⁠are still down 12% this year.

** On the policy front, China left benchmark lending rates unchanged ⁠for ​the 12th consecutive month in May on Wednesday, in line with market expectations. ** First-quarter 2026 earnings from internet giants reported over the past week ⁠have bolstered confidence in a valuation re-rating for the MSCI China Index, prompting an ⁠upgrade of ⁠the consumer discretionary sector to "neutral" from "underweight", JP Morgan said in a note. The investment bank also reiterated its positive view on China's ‌AI sector.