SHANGHAI: China and Hong Kong stocks fell on Wednesday, tracking broad declines across Asia on heightened Middle East tensions and inflation concerns. China’s blue-chip CSI300 Index edged down 0.3% by the lunch break, while the Shanghai Composite Index lost 0.5%.

Hong Kong benchmark Hang Seng was down 0.6%.

The CSI New Energy Index rose 1% as stalled US-Iran talks kept oil prices elevated.

President Donald Trump said the United States may need to strike Iran again but suggested Iran wants a deal to end the war that has roiled markets and sent energy prices soaring.

Onshore semiconductor shares rallied 3.1%, with Hua Hong Semiconductor Ltd. up 11%, after Yangtze Memory Technologies, the country’s largest domestic flash memory chip maker, submitted its initial public offering tutoring registration report, marking the official start of its onshore listing process.

Onshore financial and property shares fell 0.8% and 2.4%, respectively. On the policy front, China left benchmark lending rates unchanged for the 12th consecutive month in May on Wednesday, in line with market expectations.

Tech majors listed in Hong Kong were up 0.2%, after having declined 12% this year.

First-quarter 2026 earnings from internet giants reported over the past week have bolstered confidence in a valuation re-rating for the MSCI China Index, prompting an upgrade of the consumer discretionary sector to neutral from underweight, analysts at JP Morgan said in a note.

The investment bank also reiterated their positive view towards China’s artificial intelligence sector.‑Reuters