China stocks flat as investors turn defensive on fresh US trade tension

China stocks were largely flat after a wobbly trading session on Thursday, as defensive sectors continued to support the market amid ongoing sector rotation despite fresh trade barbs. ** The Shanghai Composite index gained 0.1% to 3,916.23 points and the blue-chip CSI300 index added 0.3%, both recovering from weakness in earlier trades.

** Hong Kong's Hang Seng Index was flat at 25,888.51 points after swinging between gains and losses throughout the day. ** "The broad indexes could get bumpy in short term, but the market would still find new industry trends to push higher," analysts at BOCI Securities said in a note.

** Although risk factors such as trade frictions have intensified and dented market sentiment, the fundamental long-term logic supporting this round of A-share bull run remains intact, they added. ** On Wednesday, top U.S. officials blasted China's major expansion of rare earth export controls as a threat to global supply chains, but said leaders of the two countries are likely to discuss another tariff truce extension during the upcoming meeting in Korea.

** The rare earth sector declined 3% to pull back further from its all-time peak following the U.S. push-back. ** The tech sectors gave up earlier gains after TSMC reported a record quarter. Rival SMIC closed down 1.7%. China's semiconductor index dipped 0.8%, and AI-related shares weakened 0.1%.

** Financials extended recent gains to lift the market higher as investors took on more defensive positions. The insurance sector added 1.9% to its highest in 1-1/2 months, and the banking sector rallied 1.3% in its fifth straight session of gains. ** Meanwhile, Apple suppliers climbed after CEO Tim Cook pledged to boost investment in China. The CSI Consumer Electronics Index added as much as 1.9% before closing flat.