HONG KONG: China and Hong Kong stocks were mixed after a volatile session on Thursday as investors weighed the potential impact of US tariff hikes against expectations of more fiscal stimulus from Beijing.

Both the Shanghai Composite index and the blue-chip CSI 300 index added less than 0.1% at close after losing as much as 0.3% in earlier trade.

Hong Kong’s benchmark Hang Seng Index slipped 0.5% to 19,601.11.

Leading gains on the mainland, a gauge tracking automobile sector advanced 1.1% after state media Xinhua reported that China plans to extend car trade-in incentives into 2025 to stabilise market expectations.

The CSI Semiconductor Index also edged up 0.6%, with China’s biggest chip maker Semiconductor Manufacturing International Corp added 0.2% and Hua Hong Semiconductor gaining 0.9%, as traders upped bets on the domestic tech sector amid geopolitical tensions.

Sentiment was largely downbeat throughout the day after a poll of more than 50 economists by Reuters showed the US could impose nearly 40% tariffs on imports from China early next year. That could potentially slice growth in the world’s second-biggest economy by up to 1 percentage point.

Beijing could announce a higher fiscal deficit and more bond issuance in 2025 to support land and built-home buybacks as well as bank capital injection, in addition to potential stimulus to offset the shock from US tariffs in the near future, analysts at Bank of America said in a note.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.5% while Japan’s Nikkei index was down 0.9%.