Updates to market close

SHANGHAI, May 7 (Reuters) - China and Hong Kong stocks closed higher on Thursday, led by AI and tech shares, as risk sentiment improved on hopes of a U.S.-Iran peace deal.

** China's blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC gained 0.5% each. Hong Kong's benchmark Hang Seng .HSI was up 1.6%.

** Market mood brightened after Iran said on Wednesday it was reviewing a U.S. peace proposal that sources said would formally end the war but leave unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

** "Despite the lack of a definitive resolution, defensive positioning has lowered the threshold for positive surprises to influence price action," UBS strategist Rohit Arora said.

** Onshore energy shares .CSIEN fell 4.3%, the Coal Index .CSI000820 dropped 4.8%.

** The 5G Communication Index .CSI931079 led gains onshore, up 4.1%.

** Hong Kong-listed tech majors .HSTECH were up 3.1%, following an overnight rally in their counterparts listed in New York. Alibaba shares 9988.HK jumped 5%.

** China's tourism sector saw a rise in trips during the May Day holiday, though official data released the day after the five-day break did not include spending figures that usually provide a fuller picture of consumption over the period.

** Chinese liquor shares .CSI399997 edged up 0.5%, while food and beverage stocks .CSI000807 were roughly flat.

** Markets are watching closely for U.S.-China developments as U.S. President Donald Trump is set to meet Chinese President Xi Jinping this month on his first visit to China in eight years.