Tech Shares Tumble Amid Positive Service Sector Growth in China

China and Hong Kong stocks fell on Wednesday as tech shares declined, despite China's services growing at the fastest rate in three months. The Hang Seng and CSI300 both saw drops, amidst concerns over weakening domestic manufacturing. Meanwhile, solar and coal sectors saw notable gains.

In mid-week trading, China and Hong Kong stock markets witnessed a downturn, led by declining tech shares, even though China's private survey indicated the strongest service sector growth in three months.

The CSI300 Index dipped by 0.2% by midday, and the Shanghai Composite remained unchanged, while Hong Kong's Hang Seng Index fell by 0.4%. This growth in services, driven by increased new orders and a hiring surge, contrasts with ongoing economic challenges, particularly in manufacturing and construction.

Meanwhile, AI-related shares saw significant losses, dropping over 3% to a monthly low, with fears that AI may replace traditional software impacting global markets. Nevertheless, gains were recorded in defensive sectors, banking stocks rose close to 1%, consumer staples climbed 1.1%, and solar sector stocks surged nearly 7% following reports of significant visits from influential figures like Elon Musk.