Hang Seng Index rises as tech hits skids on mainland

The mainland's blue-chip Hang Seng Index fell more than two percent to a one-year low on Monday as optimism over the US-China summit diminished, focusing investors on economic imbalances and geopolitical risks. The tech index saw a 0.4 percent decline, while the China enterprises index rose slightly. The Shanghai Composite Index dropped 1.67 percent, and the Shenzhen Component Index plunged 3.44 percent.

The ChiNext Index suffered the steepest decline, falling 4.53 percent. This tech slump followed US lawmakers' moves to restrict the use of Chinese-made components in AI data centers, dampening an already cautious risk appetite before a week-long holiday. Despite a reported agreement to reduce tariffs on $30 billion of goods and a dialogue on AI between President Xi Jinping and US President Donald Trump, divisions persist on technology, security, trade, and international governance.

US lawmakers introduced legislation to prevent the federal government from equipping sensitive systems with Chinese-made AI components. This dampened the outlook for Chinese optical transceiver makers Eoptolink Technology and Innolight Technology. China's CSI 300 Telecommunication Services Index slipped to a two-month low, and chipmakers suffered after news that China might allow domestic companies to buy Nvidia chips. The Nikkei dropped after the broader Topix weakened.