China and Hong Kong stocks closed almost flat on Tuesday as investors remained cautious ahead of China's May manufacturing data.

** China's blue-chip CSI300 Index and the Shanghai Composite Index were up 0.1%.

** Hong Kong's benchmark Hang Seng Index edged up 0.2%, while the China Enterprises Index gained 0.5%.

** China's factory activity likely contracted further in May, a Reuters poll showed on Monday, adding to pressures facing the world's second-biggest economy amid an uneven economic recovery from the COVID-19 pandemic. The official manufacturing Purchasing Managers' Index (PMI) will be released on Wednesday.

** "Sentiment around China continues to be bearish ahead of May's manufacturing PMI due on Wednesday," UBS analysts wrote in a note.

** Meanwhile, tensions between the world's two largest economies continued. China has declined a request by the United States for a meeting between their defense chiefs at an annual security forum in Singapore this weekend, media reported on Monday, a new sign of strain between the powers.

** Despite the overall subdued sentiment, artificial intelligence shares jumped 3.2%.

** Some AI companies' stocks soared on the brain-computer interface concept, with Innovative Medical Management Co Ltd and Jiangsu Apon Medical Technology Co Ltd surging 10.0% and 20.0%, respectively.

** Stocks of state-owned enterprises (SOEs) regained popularity among investors. CRRC Corp Ltd, the rolling stock manufacturer giant, rose as much as 10%.

** Tech stocks traded in Hong Kong gained 1.5% by market close, with Alibaba and Tencent up 1.3% and 1%, respectively. (Reporting by Shanghai Newsroom; Editing by Sohini Goswami)