China’s stocks flat as defensive gains offset tech weakness

China's stocks remained largely flat on Tuesday as defensive sectors managed to offset the decline in technology shares due to a lack of driving factors. By midday, the Shanghai Composite index was up 0.03% to 3,987.56 points, while the blue-chip CSI300 index dropped 0.06%. The tech-heavy ChiNext Composite Index fell 0.9%, and the tech-focused STAR50 Index declined 1.5%.

The semiconductor sector's CSI Semiconductor Index also declined by 2%. However, defensive sectors helped cushion the broader market, with the CSI Liquor Index rising 2.7% and the consumer staples sector increasing by 1.6%. Banking stocks also saw a gain of 1.1%. Analysts at Hwabao Securities expect sentiment to remain cautious, with trading likely to stay within a narrow range.

The analysts note that markets are in an earnings lull and are awaiting confirmation of the Chinese and US leaders' meeting schedule, as well as Federal Reserve Chair Kevin Warsh's hawkish comments, which have led investors to reassess the interest-rate outlook. In Hong Kong, the Hang Seng Index fell 1% to 25,310.88, while the Hang Seng Tech Index decreased 0.8%.

Online fast-fashion retailer Shein (0625) experienced a sharp 8% drop in its debut trading, as investors worried about the impact of delays in its listing and its competitive disadvantages. Globally, stock markets faced pressure as bond yields surged to record highs due to increased selling, and rising oil prices surpassed $90 a barrel following renewed Middle Eastern conflicts.