Chinese stocks flat as tech drags, investors seek defensive plays

Dec 18, 2025, 11:38 GMT+7

Reuters - China shares were flat on Thursday as investors rotated into defensive sectors amid concerns over artificial intelligence spending and regional tensions, while tech and property stocks weighed on sentiment.

** As of the midday trading break, the benchmark Shanghai Composite Index  added 0.2% to 3,876.40. The blue-chip CSI300 Index  dropped 0.6%.

** In Hong Kong, the benchmark Hang Seng Index weakened 0.4%. The Hang Seng Tech Index  lost 1.3%, bringing the loss since the October peak to roughly 20%.

** Leading gains onshore, China's CSI Defense Index (.CSI399959) rose more than 2% to a two-month high, after the U.S. approved an $11.1 billion arms package for Taiwan, the largest ever.

** The CSI Banks Index added 1% and the energy sector index  jumped 0.8% as investors piled into defensive plays.

** The financials sector  climbed 0.2%, with broker CICC  surging by the daily limit of 10% after it unveiled plans on Wednesday to buy two smaller rivals in a share-swap deal worth about $16 billion.

** Among the laggards, the CSI AI Index  lost 1.4% and the semiconductor sector lost 1.1%, after jitters over AI funding dragged tech stocks on Wall Street overnight.

** The CSI 300 Real Estate Index  lost 1.4% as developer Vanke's debt crisis continued.

** "We continue to expect the market to remain volatile at elevated levels, and a clearer signal of sustained upside is still needed," analysts at Huaan Securities said in a note.

** "January following a strong year tends to see heightened swings, suggesting short-term risks of a pullback remain," they added.

** Broader in the region, shares fell as the tech sector took a beating on renewed angst about AI spending, while investors braced for a wave of central bank meetings set to underscore policy divergence worldwide.

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