China stocks fall on industrial profits slump, geopolitical tensions; HK also down

SHANGHAI: China and Hong Kong stocks fell on Monday, led by Chinese state-owned enterprises and tech shares, as China’s industrial profit slump and geopolitical tensions dented sentiment.

** China’s blue-chip CSI300 Index and the Shanghai Composite Index both dropped 1.0% by the lunch break.

** Hong Kong’s benchmark Hang Seng Index was down 0.5%, and the China Enterprises Index lost 1.0%.

** Profits at industrial firms in China declined 22.9% in the first two months of 2023 from the year before, as the factory sector struggles to claw its way out of the slump caused by COVID-related disruptions.

** A senior Communist Party official said on Saturday that the foundation of China’s economic recovery is not solid enough, warning of possible spillover effects from global economic problems.

** Geopolitical tensions also weighed. Putin said on Saturday that Russia would station tactical nuclear weapons in Belarus. ** Shares of Chinese state-owned enterprises dropped, giving up some of this month’s gains. Shares of China Petroleum & Chemical Corp lost 3.4% after the company recorded a 6.9% decline in net income for 2022. Meanwhile, PetroChina Co Ltd slid 2.1%.

China stocks fall on rising Sino-US tensions

** Shares of telecommunication services declined 1.7%, with China United Network Communications Ltd, China Mobile Ltd, and China Telecom Corp Ltd, down 2.9%, 4.1%, and 5.9%, respectively.

** Tech stocks traded in Hong Kong slumped 1.7%, led by Meituan and Xiaomi. Shares of Meituan declined as much as 6.7%, following its fourth-quarter earnings release.