China shares ended flat on Thursday as investors rotated into defensive sectors amid concerns over artificial intelligence spending and regional tensions, while tech and property stocks weighed on sentiment.

In Hong Kong, the benchmark Hang Seng Index was up just over 29 points, or 0.12 percent, at 25,498 while the Hang Seng Tech Index lost 39 points, or 0.7 percent, to 5,418 and the China Enterprises Index lost two points, or 0.02 percent, to end at 8,841.

Up north, the benchmark Shanghai Composite Index was up just over six points, or 0.16 percent, at 3,876 while the Shenzhen Components Index was down 170 points, or 1.29 percent, at 13,053.

The blue-chip CSI300 Index dropped 0.6 percent, with both it and the Shanghai Composite headed towards a week of losses.

The CSI Banks Index added two percent and the energy sector index jumped 1.7 percent as investors piled into defensive plays.

The financials sector climbed 0.8 percent, with broker CICC soaring as much as 10 percent to the daily limit after unveiling plans on Wednesday to buy two smaller rivals in a share-swap deal worth about US$16 billion.

Among laggards, the CSI AI Index and the semiconductor sector both lost 1.8 percent after jitters over AI funding dragged tech stocks on Wall Street overnight.

The CSI 300 Real Estate Index lost 1.8 percent as developer Vanke's debt crisis continued.

"We continue to expect the market to remain volatile at elevated levels, and a clearer signal of sustained upside is still needed," analysts at Huaan Securities said in a note.

"January following a strong year tends to see heightened swings, suggesting short-term risks of a pullback remain," they added. (Reuters/Xinhua)