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

China's stock market exhibited mixed performance on Monday, with Hong Kong shares managing to inch up while Chinese indices oscillated. The Shanghai Composite index rose 0.2% to 3,894.28 points by midday, whereas the blue-chip CSI300 index slipped by 0.3%. Tech stocks, however, suffered significant losses, with the ChiNext Composite index plummeting 0.5% and the STAR50 index declining 0.9%.

The CSI AI Index and CSI Semiconductor Index also experienced declines, falling 1.2% and 0.7%, respectively. Defensive sectors, on the other hand, managed to post modest gains, including a 0.5% increase in the banking sector.

In Hong Kong, the Hang Seng Index added 0.4%, while the Hang Seng Tech Index rose 0.2%. However, the Hang Seng AI Index saw a steeper decline of 2.4%, with Z.AI shares plummeting as much as 10.5% to their lowest level in five months. This downturn was prompted by a discounted share placement, which sent the company's shares tumbling. Another peer, Minimax, also experienced a sharp drop of 5.6% by the noon trading break.

Analysts at Guotai Haitong Securities maintain cautious optimism, noting that with stagnant growth prospects and subdued stock-market liquidity, investors are steered away from risk-taking and are poised for more definitive evidence of fundamental improvements. They also expect the markets to remain range-bound, given the complex global backdrop.

Meanwhile, regional share markets across Asia experienced a downturn on Monday due to oil price surges triggered by supply concerns, and investors braced for potential interest rate hikes in the United States and Japan later in the week.