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

In Hong Kong, the benchmark Hang Seng Index dropped 264 points, or one percent, to close at 25,386 on turnover of HK$298.55 billion.

The China enterprises index was 129 points, or 1.5 percent, down at 8,475 while the tech index was 104 points, or 2.2 percent, down at 4,768.

The Shanghai Composite Index closed down 84 points, or 2.04 percent, at 4,077 in its biggest single-day drop since March 23 on turnover of 1.6 trillion yuan.

The Shenzhen Component Index fell 322 points, or 2.07 percent, to 15,247 on turnover of 1.89 trillion yuan while the ChiNext Index dropped 92 points, or 2.35 percent, to 3,829 on turnover of 896 billion yuan.

"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.

Geopolitical uncertainties also weighed on sentiment.

US President Donald Trump on Wednesday said 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 Zhang Xiaoning, China equity strategist at JPMorgan, 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.

In Tokyo, the Nikkei share average climbed 1,879 points, or 3.14 percent, to close at 61,684 in its biggest one-day increase since May 7 on renewed enthusiasm for technology stocks and easing geopolitical tensions linked to the Iran war.

The broader Topix climbed 62 points, or 1.64 percent, to 3,853.

In Seoul, the Kospi closed up 606 points, or 8.42 percent, at 7,815, marking its highest closing level since May 14 and biggest one-day gain since April 1, as a Samsung Electronics pay deal eased concerns over potential industrial action disrupting the country's economy and global chip supply. (Reuters/Xinhua)