STOCKS | Hong Kong's Hang Seng Index Rises Amid Mainland Tech Sector Decline

Mainland Chinese stocks fell to a six-week low on Monday, driven by a decline in the tech sector following tepid factory data that heightened concerns about slowing growth momentum. In contrast, Hong Kong's Hang Seng Index rose by 215 points, or 0.9%, to 25,398, with a turnover of HK$330.94 billion, according to RTHK. The China Enterprises Index increased by 82 points, or 1%, to 8,507, while the Tech Index climbed 80 points, or 1.7%, to 4,964. In mainland China, the Shanghai Composite Index closed down 10 points, or nearly 0.3%, at 4,057, with a turnover of 1.32 trillion yuan. The Shenzhen Component Index dropped 234 points, or 1.5%, to 15,340, and the ChiNext fell 87 points, or 2.15%, to 3,950, with a turnover of 728.5 billion yuan. The tech sector led the decline, with the CSI AI Index down 2.5% and the CSI Semiconductor Index dropping 5.8% to a two-week low. The Star 50 Index slipped 5% to a three-week low. Wu Zhou, a fund manager at Shenzhen Deyuan Investment, attributed the tech stock decline to the sector's previous gains, overcrowded trades, and news of state semiconductor funds reducing their stakes. "The biggest negative is simply that prices have risen too much," Wu said, noting that heavily concentrated positions in chipmaking and AI could trigger a sell-off. China's factory activity stalled in May as new export orders contracted and input costs rose, according to an official survey. A private survey indicated slower manufacturing sector expansion last month. Investors may be taking profits from tech stocks after a recent rally and adjusting positions ahead of anticipated chip IPOs like ChangXin Memory Technologies, said Kenny Ng, a securities strategist at Everbright Securities International. Elsewhere, China's planned index rebalancing is expected to trigger an estimated US$48 billion in two-way passive investment flows, as major indexes undergo semi-annual adjustments later this month, according to Goldman Sachs. In Tokyo, the Nikkei share average reached a record high, ending the day up 604 points, or 0.9%, at 66,934, driven by AI-related stocks. In Seoul, the Kospi closed up 312 points, or 3.68%, at 8,788, its highest closing level on record, as chipmakers and technology firms rallied on strong exports and optimism around AI cooperation with Nvidia.