China stocks mixed as tech shares fall, Z.AI tumble on discounted share placement

China stocks were mixed while Hong Kong shares edged higher on Monday, as weakness in AI and semiconductor stocks offset gains in defensive sectors, with investors remaining cautious ahead of key global central-bank decisions.

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

Tech shares led declines, with the start-up board ChiNext Composite index weaker by 0.5% and Shanghai’s tech-focused STAR50 index down 0.9%.

The CSI AI Index declined 1.2% and the CSI Semiconductor Index weakened 0.7%. Defensive sectors inched higher, offsetting some losses, with the banking sector gaining 0.5%.

In Hong Kong, the benchmark Hang Seng Index added 0.4% and the Hang Seng Tech Index added 0.2%.

However, the Hang Seng AI Index dipped 2.4%, with shares of Z.AI sliding as much as 10.5% to the lowest level in five months after a discounted share placement. Peer Minimax dropped 5.6% by noon trading break.

“Looking ahead, with little change in the outlook for growth or stock-market liquidity while the global backdrop remains complex, investors are backing away from the risk-taking approach and are likely to demand clearer evidence of fundamental improvement,” analysts at Guotai Haitong Securities said in a note, adding that the markets are likely to stay range-bound going forward.

Around the region, Asian share markets slid in Asia on Monday as supply concerns caused oil prices to spike anew, while investors braced for possible interest rate hikes in both the US and Japan this week.