China’s blue-chip CSI300 Index and the Shanghai Composite Index both lost 0.6%.

Hong Kong’s benchmark Hang Seng edged up 0.1%.

“Many investors are eyeing new opportunities in sectors with low valuations after recent profit taking,” UBS analysts said in a client note.

“Investors who haven’t adjusted their positions since October remain bearish, anticipating volatility until mid-2026, with potential market recovery tied to improving earnings in Q2 or Q3 of 2026,” they said.

China’s blue-chip index has matched the S&P 500 with a roughly 16% year-to-date gain, while Hong Kong’s Hang Seng – up about 30% – is on course for its most substantial annual rise since 2017.

Meanwhile, investors are awaiting readouts from the annual agenda-setting Central Economic Work Conference and the December Politburo meeting.

Year-end and early new year mark a key window for the government to set annual policy targets, while listed firms face a lengthy earnings vacuum, creating hotspots and room for speculative flows, said analysts at Avic Securities in a note.

“However, possibly because liquidity is tighter at year-end, overall market risk appetite is leaning more toward prudence,” the analysts said.

China Vanke shares traded onshore and offshore both edged up after the developer sought to defer one bond repayment by a year.

Tech majors traded in Hong Kong fell 0.5%, while onshore AI stocks dropped 0.9%.