Mainland and Hong Kong stocks tumbled on Tuesday as investors booked profits and sought shelter in defensive plays, spooked by renewed Sino-US trade tensions that appear more entrenched than anticipated.

The benchmark Hang Seng Index ended the day down 448 points, or 1.73 percent, at 25,441, extending its losing streak to seven sessions, the longest since January 2024. The city's tech index plunged as much as 4 percent in its worst day since April.

The benchmark Shanghai Composite Index ended down 0.62 percent at 3,865 while the Shenzhen Component Index closed 2.54 percent lower at 12,895.

The combined turnover of these two indexes stood at 2.58 trillion yuan, up from 2.35 trillion yuan on Monday.

Shares related to banks and coal led gains while stocks related to semiconductors and consumer electronics suffered major losses.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 3.99 percent to close at 2,955.

The selling gathered pace in the afternoon session as new fronts opened in the trade war. Beijing imposed sanctions on US-linked subsidiaries of South Korean shipbuilder, right after China and the United States said they will slap implement additional port fees targeting each others' vessels.

"The market's reaction was too complacent yesterday so now it's being corrected back down," said Jason Chan, senior investment strategist at Bank of East Asia, predicting further near-term weakness.

Some investors also worry that so-called American allies could get involved in encircling China, risking a wider and more protracted trade conflict, he said.

The Dutch government's move to take control of Chinese-owned chipmaker Nexperia sparked concerns about deeper technology-security tensions, weighing on sentiment toward Chinese tech asset.

Technology sectors led the retreat on Tuesday, with the CSI Semiconductor Industry Index down 6.9 percent and the CSI Artificial Intelligence Index falling 5.1 percent. Wingtech Technology, owner of Nexperia, tumbled by the 10 percent daily limit.

Defensive sectors outperformed as risk appetite soured. China's insurance sub-index and liquor makers each climbed nearly 3 percent, while banking shares added 2.5 percent.

"The recent sell-off indicates that the tit-for-tat trade conflict between the US and China isn't going to end that easily, and this could impact markets even further ahead of Trump's meeting with Xi Jinping towards the end of the month," said Jeff Mei, COO at blockchain technology firm BTSE. (Reuters/Xinhua)