China stocks end mixed as gold shares rise, insurers drag Hong Kong lower

Chinese stocks ended mixed as higher gold prices offset weakness in technology counters, while Hong Kong's market slid on heavy losses among insurers.

The benchmark Shanghai Composite index closed 0.6% higher, while the blue-chip CSI300 index eased 0.2%. Technology shares tracked losses among regional peers, with the startup board CHINEXT dropping 0.6%.

Higher gold prices helped cushion the tech weakness, with spot gold hitting a seven-week high on a softer dollar and lower Treasury yields amid optimism over the reopening of the Strait of Hormuz. The CSI non-ferrous metals sub-index gained 0.7%.

The latest round of tit-for-tat Sino-US measures renewed trade and technology tensions, though their impact on markets was limited. A sub-index tracking the photovoltaic industry shed 1.2%.

"Both economic and geopolitical superpowers are set on minimising their technological dependencies on the other, and we are, therefore, locked into an ongoing global technological schism," said William Bratton, head of cash equity research for APAC at BNP Paribas.

In Hong Kong, the benchmark Hang Seng index fell 1.5%, while the city's technology shares lost 2.3%.

Insurers led the losses after Reuters reported, citing sources, that China's mainland tax authorities had begun levying taxes on insurance policy income earned offshore. Shares of Prudential fell 4.6% and AIA Group slumped 6%.

Investors will now focus on trade data, due on Friday, for signals on the strength of China's economy.

"China's 'two-speed' economy is not merely an economic phenomenon, but a deliberate outcome of the 'Just Enough' rule, under which policymakers provide just enough stimulus to meet the growth target," said Larry Hu, chief China economist at Macquarie.

"The 'Just Enough' rule implies that if the strong track (exports and manufacturing) is strong, policy support for the weak track (consumption and property) will remain restrained," Hu said.