Chinese Markets Mixed as Investors Pivot From AI Stocks

Chinese equity markets experienced divergent performance on September 4, 2026, as investors rotated capital away from artificial intelligence and technology stocks toward traditional sectors. The CSI300 and Shanghai Composite indices rose 0.4% by midday, and the Hang Seng Index climbed 2.1%. In contrast, the tech-heavy STAR50 Index fell 0.7%.

Morgan Stanley analysts lowered China equity index targets, citing regulatory uncertainty, tighter liquidity, and weak domestic macro data. Despite these headwinds, individual gains were seen in Kweichow Moutai, which rose 2.4% as investors sought consumer staples, and Alibaba Group, which gained 3.4% during a rebound of Hong Kong tech majors. Xiaomi shares also increased following the announcement of a deal with German auto dealers.

Market activity in Hong Kong was supported by comments from US Federal Reserve Governor Christopher Waller, who suggested interest rates could remain steady if inflation data continues to moderate. Despite the daily gains in some indices, the CSI300 is positioned to close the week nearly 1% down, while the Hang Seng Index has risen 0.6% for the week.