China, HK stocks snap three-day rally as AI enthusiasm wanes

Updates to market close

SHANGHAI, Feb 11 (Reuters) - China and Hong Kong stocks declined on Tuesday, ending a three-session rally, as investor enthusiasm for artificial intelligence and chip stocks cooled, while traders weighed U.S. President Donald Trump's latest tariffs.

China's blue-chip CSI 300 Index .CSI300 ended 0.5% lower, while the Shanghai Composite Index .SSEC slipped 0.1%. Hong Kong benchmark Hang Seng .HSI was down 1.1%.

AI stocks .CSI930713 slid 0.6%, following a 12% surge since the market reopened after the Chinese New Year holidays, driven by the momentum from startup DeepSeek.

Hong Kong-listed tech majors .HSTECH dropped 2.7%, also snapping three consecutive sessions of gains.

Semiconductor shares .CSIH30184 fell 1.1% after Trump raised tariffs on steel and aluminium imports to 25% on Monday, and said that he would also announce on reciprocal tariffs against all countries imposing duties on U.S. goods over the next two days.

He also mentioned considering tariffs on cars, semiconductor chips, and pharmaceuticals.

Shares in Chinese automakers Xpeng 9868.HK and Geely Auto 0175.HK tumbled 9.0% and 10.2%, respectively, on worries that they will struggle to compete against BYD's 1211.HK move to offer smart driving features across almost all of its line-up for free. BYD shares 002594.SZ were roughly flat.

After the DeepSeek surprise during the Chinese New Year holidays, intelligence initiatives will likely remain a key theme among auto stocks, UBS analyst Paul Gong said.

In the longer term, Gong sees Chinese carmakers taking the lead globally on intelligence innovation, democratising these technologies in mass-market cars.

Chinese battery giant CATL 300750.SZ plans to file a Hong Kong listing application this week to raise at least $5 billion, according to two sources. Its shares fell 2.6%.

Meanwhile, Trump said he had spoken to Chinese President Xi Jinping since taking office on January 20, but did not offer details on the topics of their conversation.

A conversation between Xi and Trump is seen as crucial to a potential easing or delay of trade tariffs.