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

China stocks experienced a mixed performance and Hong Kong shares saw a slight rise on Monday, as declines in AI and semiconductor stocks counterbalanced gains in defensive sectors. Investors remained cautious ahead of important global central-bank announcements. The Shanghai Composite index was up 0.2% at 3,894.28 points at midday, while the blue-chip CSI300 index dropped 0.3%. Among tech shares, the ChiNext Composite index fell 0.5% and Shanghai's tech-focused STAR50 index declined 0.9%.

The CSI AI Index decreased 1.2% and the CSI Semiconductor Index weakened by 0.7%. Defensive sectors managed to gain slightly, partially offsetting some losses, with the banking sector rising 0.5%. In Hong Kong, the benchmark Hang Seng Index added 0.4% and the Hang Seng Tech Index increased 0.2%. However, the Hang Seng AI Index fell 2.4%, with Z.AI shares dropping as much as 10.5% to their lowest level in five months following a discounted share placement. Minimax shares also fell 5.6% by noon trading.

Looking ahead, with little change in growth outlook or stock-market liquidity, despite a complex global backdrop, investors are shifting away from risk-taking strategies and are expected to demand clearer signs of fundamental improvement, according to analysts at Guotai Haitong Securities. They believe the markets will likely remain range-bound going forward.

In the broader region, Asian share markets declined on Monday due to supply concerns driving oil prices higher, with investors preparing for potential interest rate hikes in both the US and Japan later that week.