HONG KONG: China and Hong Kong stocks dropped on Thursday, as investors weighed the prospects of a de-escalation in the Middle East conflict.
At the close, China’s blue-chip CSI300 Index fell 1.3 percent, while the Shanghai Composite Index dipped 1.1 percent.
Hong Kong’s benchmark Hang Seng lost 1.9 percent.
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. 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, with cloud computing and insurance leading the decline, down 3.2 percent and 3 percent, respectively.
Energy stocks, however, outperformed, gaining 0.9 percent. In Hong Kong, the Hang Seng Tech index tumbled 3.3 percent, with heavyweight Kuaishou slumping 14 percent.
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 percent, to reflect the modest impact from oil supply shock, adding the country is “relatively well-insulated” from rising energy prices.
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