SHANGHAI, Feb 11 (Reuters) - China and Hong Kong stocks

edged lower on Tuesday, ending a three-day rally, as investor

enthusiasm for artificial intelligence and chip stocks cooled,

while traders weighed the latest tariff threats from U.S.

President Donald Trump.

** China's blue-chip CSI300 Index edged down 0.4%

by the lunch break, while the Shanghai Composite Index

lost 0.2%. Hong Kong benchmark Hang Seng was down 0.6%.

** Artificial intelligence shares in China

edged up just 0.4%, following a 12% surge since the market

reopened after the Chinese New Year holidays, driven by the

momentum from startup DeepSeek.

** Hong Kong-listed tech majors were set to snap

three consecutive sessions of gains with a 1.6% drop.

** Semiconductor shares fell nearly 1% after

Trump lifted tariffs on steel and aluminium imports to 25% on

Monday.

** Trump said that he would follow Monday's actions with

announcements on reciprocal tariffs against all countries

imposing duties on U.S. goods over the next two days. He also

mentioned considering tariffs on cars, semiconductor chips, and

pharmaceuticals.

** Shares in Chinese automakers Xpeng ( XPEV ) and Geely

Auto both tumbled more than 7% on Tuesday on worries

that they will struggle to compete against BYD's move

to offer smart driving features across almost all of its line-up

for free. BYD shares edged 0.2% higher.

** After the DeepSeek surprise during the Chinese New Year

holidays, intelligence initiatives will likely remain a key

theme among auto stocks, UBS analyst Paul Gong said.

** In the longer term, Gong sees Chinese carmakers taking

the lead globally on intelligence innovation, democratising

these technologies in mass-market cars.

** Chinese battery giant CATL plans to file a

Hong Kong listing application this week to raise at least $5

billion, according to two sources with direct knowledge of the

matter.

** Meanwhile, Trump said he had spoken to Chinese President

Xi Jinping since taking office on January 20, but did not offer

details on the topics of their conversation.

** There has been little sign of progress toward a trade

arrangement between Beijing and Washington, but expectations for

a breakthrough remain high.