China stocks fall as Iran de-escalation uncertainty weighs

HONG KONG: China and Hong Kong stocks declined on Thursday as investors weighed the prospects of a de-escalation in the Middle East conflict.

China’s blue-chip CSI300 Index was down 0.47% by the lunch break, while the Shanghai Composite Index fell 0.58%.

Hong Kong’s benchmark Hang Seng lost 1.5%.

President Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister who said his country was reviewing a US proposal but had no intention of holding talks to wind down the conflict.

Market participants said regional stocks, including China, struggled for direction amid uncertainty over the direction of the war.

“We have not been adding on the dips (given market volatility)”, said Daniel Tan, portfolio manager at Grasshopper Asset Management.

Major sectoral indexes fell across the board, including food and beverage and cloud computing. Energy stocks, however, outperformed, up 0.5%.

In Hong Kong, the Hang Seng Tech index dropped 2.2%, with heavyweight Kuaishou slumping 13%.

Meanwhile, Trump plans to meet Chinese President Xi Jinping in May, a closely watched trip postponed due to the ongoing Iran war.

Trump has sought support from the world’s major oil consumers, including China, to help reopen the Strait of Hormuz.

Goldman Sachs analysts remained overweight on Chinese equities, despite higher-for-longer energy prices caused by the Middle East conflict.

The bank slightly trimmed 2026 earnings growth forecast for both mainland and Hong Kong shares by 1 percentage point to 12%, to reflect the modest impact from oil supply shock, adding the country is “relatively well-insulated” from rising energy prices.

The smaller Shenzhen index was down 0.64%, the start-up board ChiNext Composite index was weaker by 0.07% and Shanghai’s tech-focused STAR50 index was down 1%.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.76%, while Japan’s Nikkei index was down 0.33%.