China and Hong Kong stocks fell on Tuesday, as a mild rebound in AI hardware shares failed to offset losses elsewhere, with mixed August data pointing to persistently weak domestic demand.
** China's blue-chip CSI300 Index ended 0.7 percent lower, while the Shanghai Composite Index lost 0.5 percent. Hong Kong benchmark Hang Seng was down 1 percent.
** China's industrial output picked up pace in August, though sluggish consumption and a worsening investment slump reinforced concerns over deepening economic imbalances.
** Meanwhile, new home prices fell again in August, underscoring persistent weakness in the housing market.
** The CSI 300 Financial and Real Estate Index fell around 1 percent each, while consumer staple shares lost 0.6 percent.
** "Following weaker-than-expected credit demand, August activity data reinforced our view that a recovery in domestic demand remains elusive," Barclays analysts said in a note, adding that they maintain their below-consensus 2026 GDP growth forecast of 4.5 percent.
** The tech-focused STAR50 Index rose as much as 3 percent, rebounding for the first time in a week from a 4-1/2-month low. The CSI Semiconductor Material and Equipment Thematic Index gained 3.2 percent.
** Onshore sentiment has weakened over the past month, after investors took profits from a record-breaking AI-led rally earlier this year. Liquidity has also dried up. Daily turnover of onshore shares hovered near the lowest level since April over the past week.
** Tech majors listed in Hong Kong lost 0.6 percent, with Tencent (0700) up nearly 2 percent.
** Shares of Guangdong Tianyu Semiconductor (2658) jumped more than 7 percent on the company's share buyback plan.
Reuters
