China stocks slip as investors eye US-Iran talks

SHANGHAI: Mainland China stocks slid while Hong Kong shares inched higher on Tuesday, as investors anxiously awaited potential peace talks between the United States and Iran to ease tensions in the Middle East and relieve a recent global energy supply shock.  

Iran was considering attending peace talks with the United States in Pakistan, a senior Iranian official told Reuters on Monday, following moves by Islamabad to end a US blockade of Iran’s ports, a significant obstacle to Tehran rejoining peace efforts as the end of a two-week ceasefire approaches. At the midday break, the benchmark Shanghai Composite index slipped 0.24%, while the blue-chip CSI300 Index lost 0.35%.

Artificial intelligence shares were among the biggest drags in morning deals, with a sub-index tracking the sector dropping 2.42% by midday.

In Hong Kong, the benchmark Hang Seng Index inched up by 0.13%, while the city’s tech shares lost 0.74%.

“We see about 5-10% upside for Chinese equities towards year-end with a few positive developments shaping up; however, near-term volatility remains high,” analysts at Morgan Stanley said in a note this week.

“We also expect the path to remain choppy in the near term with volatility persisting through May to July given uncertainty around the US-China presidents meeting, first-quarter earnings season, IPO shares unlocking as well as the ongoing Middle East situation.”

Separately, shares of Chinese circuit board maker Victory Giant Technology jumped 60% in their Hong Kong debut on Tuesday, after raising HK$20.1 billion in a share sale in the city’s biggest listing in about seven months.

Hong Kong carrier Cathay Pacific is aiming to raise about HK$2 billion through a one- or two-tranche fixed-rate Hong Kong dollar bond, sources told Reuters. ‑Reuters