China stocks flat, Hong Kong drops as markets struggle for direction

China stocks traded largely ​flat on Tuesday, while Hong Kong ​stocks declined as investors await further ‌catalysts amid ​artificial intelligence optimism. ** At the midday break, China's blue-chip CSI300 Index edged up 0.06%, while the Shanghai Composite Index was 0.07% lower. It explains why China's tech rally lags its ​peers in Asia and U.S., they added. ** Hong Kong-listed Chinese internet majors lost 1.2% by ⁠midday.

China stocks traded largely ​flat on Tuesday, while Hong Kong ​stocks declined as investors await further ‌catalysts amid ​artificial intelligence optimism.

** At the midday break, China's blue-chip CSI300 Index edged up 0.06%, while the Shanghai Composite Index was 0.07% lower. ** ‌Hong Kong's Hang Seng Index dropped 0.67%. ** Hong Kong shares of electric vehicle battery major CATL lost 6.9% after the firm completed a share placement on Tuesday to raise $5 billion. The shares ‌were sold at a 7% discount to Monday's closing price.

** Analysts said investors are ‌taking a wait-and-see approach as they are digesting a flurry of first-quarter earnings releases by Chinese tech companies, as well as taking light positions ahead of the Labour Day five-day holiday starting May 1. ** Market focus has shifted from ⁠recovery ​of liquidity to earnings, Nanhua ⁠Futures analysts said in a note. ** "China's AI adoption has yet to lead to meaningful impact on jobs or ⁠earnings," BofA Securities said in a note on Tuesday. It explains why China's tech rally lags its ​peers in Asia and U.S., they added.

** Hong Kong-listed Chinese internet majors lost 1.2% by ⁠midday. The sub-sector is down more than 10% so far this year. ** Also weighing on the sentiment is ⁠China ​ordering U.S. tech major Meta to unwind its acquisition of AI startup Manus, raising concerns over Beijing's tighter control over Chinese AI talent and technology. ** In mainland China, software and ⁠defence stocks led the decline, while real estate outperformed. ** The smaller Shenzhen index was down 0.54%, the start-up ⁠board ChiNext Composite ⁠index was weaker by 0.54% and Shanghai's tech-focused STAR50 index was down 0.22%.

** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.22% ‌while Japan's ‌Nikkei index was down 0.92%.