Updates to market close

By Summer Zhen

HONG KONG, Jan 7 (Reuters) - China stocks rose on Tuesday, driven by strong performances in chip-related shares, while Hong Kong declined due to losses in Tencent after the U.S. added the tech giant and other companies to a list of firms alleged to be working with China's military.

** China's blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC climbed 0.7% each, both snapping a four-session losing streak.

** Leading the gains, shares of artificial intelligence-related companies .CSI931079 jumped 3.4% and semiconductor firms .CSI931865 advanced 3.3%. AI Chipmaker Cambricon 688256.SS surged more than 10%.

** Hong Kong benchmark Hang Seng .HSI declined 1.2%.

** The U.S. Defense Department said on Monday it has added Tencent and battery maker CATL to a list of firms allegedly aiding Beijing's military.

** The list included chipmaker Changxin Memory Technologies, Quectel Wireless 603236.SS and drone maker Autel Robotics 688208.SS.

** At the close, Hang Seng heavyweight Tencent 0700.HK slumped 7.3% and logged a fifth consecutive session of decline. It also weighed on the technology index .HSTECH, which declined nearly 1%.

** On the mainland, CATL 300750.SZ dropped 2.8%, Quectel tumbled 6.2% and Autel Robotics retreated 1.7%.

** Analysts said although the inclusion should not have a material impact on the companies, the move would keep investors on the sidelines.

** "The move implies continued volatility particularly ahead of (U.S. President-elect Donald) Trump's promise of added tariffs," said Kai Wang, Asia equity market strategist, Morningstar.

** Another concern was the move may prevent certain funds from owning the stocks due to geopolitical risks, which would mean they could go underweight on those stocks even more, Kai Wang said.

** Hong Kong-listed firms' near-term valuation expansion may be limited as offshore equities are more sensitive than onshore to geopolitical changes, BNP said in a note.

** The smaller Shenzhen index .SZSC ended up 1.6% and the start-up board ChiNext Composite index .CNT was higher by 0.7%.

(Reporting by Summer Zhen; Editing by Savio D'Souza and Sherry Jacob-Phillips)

((summer.zhen@thomsonreuters.com; 852-3462-7739;))