The China and Hong Kong stock markets fell on Thursday due to escalating geopolitical tensions in the Middle East and reduced risk appetite, with major indices recording the largest declines in recent times.
Index Performance
The Shanghai Composite Index closed down 1.4% at 4,006.55 points, briefly dropping below the 4,000-point threshold during the session. The CSI 300 Index declined by 1.6%, the ChiNext Index fell by 1.1%, and the STAR Market 50 Index dropped by 2.4%.
In the Hong Kong market, the Hang Seng Index closed down 2% at 25,500.58 points, and the Hang Seng Tech Index fell by 2.2%, as tech stocks were generally under pressure.
Geopolitical Conflict Impacts Market Sentiment
Market sentiment was weighed down by the rapidly intensifying situation in the Middle East. The escalation of conflict between Iran and the United States and its allies, involving attacks on natural gas facilities and energy infrastructure, heightened investors' aversion to risk.
Analysts pointed out that rising oil prices and increased geopolitical risk premiums have weakened market risk appetite.
Notable Sector Divergence
The non-ferrous metals and chemical sectors led the declines, with the CSCI sub-index for non-ferrous metals dropping 6.1% and the chemical index falling 4.5%. Zijin Mining's share price decreased by more than 7%.
In contrast, the energy sector rose against the trend, with the CSI 300 Energy Index up 4.2%, reflecting improved profit expectations driven by rising oil and gas prices.
