China, HK shares end lower as ME war persists

SHANGHAI: Mainland China and Hong Kong stocks ended lower on Friday, tracking broad weakness in regional peers, as the Middle East war approached the two-week mark with no end in sight.

Investors are bracing for a prolonged conflict and higher oil prices as Iran stepped up attacks across the Middle East after its new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz shipping lane closed.

At the close, the benchmark Shanghai Composite index lost 0.82 percent, while the blue-chip CSI300 Index slipped 0.39 percent.

For the week, the SSEC fell 0.7 percent, while the CSI300 gained 0.2 percent.

“We believe this is further evidence that Chinese equities offer a viable diversification option for global investors,” said James Wang, head of China strategy at UBS Investment Bank Research.

Wang said China’s higher oil inventory reserves and relatively low exposure to oil in its total energy usage should offer some downside protection to A-shares. In Hong Kong, the benchmark Hang Seng Index fell 0.98 percent, while the city’s tech shares fell 0.99 percent.