Shanghai stock benchmark logs biggest drop since March as profit-taking hits chip, AI

China stocks ​gave up earlier gains and tumbled in ​afternoon trading on Thursday, with the semiconductor ‌sector ​leading losses as profit-taking pressure piled up.

* China's blue-chip CSI 300 index was down 1.4% at market close, after rising as much as 1.8% ‌earlier in the session. * Shanghai Composite Index tumbled more than 2%, falling below the 4,100-point level in its biggest single-day drop since March 23.

* Tech sectors led the declines, with the tech-focused STAR 50 Index losing 3.7% after ‌hitting a fresh record high in the opening hours. The CSI Semiconductor Index closed down 4.4% and ‌the CSI AI Index lost 3.7%. * Indexes tracking mid-caps and small-caps were down 3.4 and 3.5%, respectively.

* "AI and chip stocks, having outperformed earlier, are now facing the steepest corrections amid profit-taking," said Kenny Ng, securities strategist at Everbright Securities International. * The correction could continue in ⁠the ​near term, compounded by disappointing ⁠macroeconomic data released earlier in the week, he said, adding the Shanghai stock benchmark could test the 4,000-point level.

* In Hong ⁠Kong, the benchmark Hang Seng Index was down 1%, and the Hang Seng Tech Index lost 2.2%. * Geopolitical uncertainties also ​weighed on sentiment. U.S. President Donald Trump said on Wednesday that negotiations with Iran were in ⁠the final stage, suggesting he was prepared to wait a few days to "get the right answers" from Tehran. But Trump also warned ⁠of ​renewed attacks if Iran did not agree to a deal.

* "From a broad market perspective, we remain positive and optimistic," said Xiaoning Zhang, China equity strategist at J.P. Morgan, forecasting a year-end target of ⁠5,200 for the CSI 300 Index in the base case. * "Against a backdrop of ample liquidity and broadly improving ⁠earnings, our strategy ⁠is to focus on high-quality growth and selective stock-picking," she added.

* Around the region, MSCI's Asia ex-Japan stock index was firmer by 2.4% while Japan's Nikkei ‌index was up 3.1%.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)