HONG KONG: China stocks ended lower on the final trading day of March and saw their worst monthly loss since early 2022, as positive manufacturing data failed to ease investor caution over the Middle East conflict. Hong Kong shares ended higher.
At the close on Tuesday, the Shanghai Composite Index was down 0.8 percent while China’s blue-chip CSI300 Index dropped nearly 1 percent.
Hong Kong’s benchmark Hang Seng Index closed the session up 0.15 percent.
For the month, the Shanghai Composite is down 6.5 percent, marking its biggest monthly loss since January 2022; the Hang Seng fell 6.9 percent, the worst month since January 2024.
China released better-than-expected March manufacturing data, with official manufacturing purchasing managers’ index (PMI) rising to 50.4, above the 50-threshold and hitting the highest point in 12 months.
A delayed Lunar New Year this year contributed to a stronger March PMI, Zhiwei Zhang, chief economist at Pinpoint Asset Management said, adding that an outlook for the second quarter remains unclear for now.
“The market is increasingly worried about the risk of global growth slowdown and supply chain disruption,” he said, adding a global growth slowdown would dampen China’s exports.
Coal and semiconductor stocks led the decline in mainland shares, down 3.8 percent and 3.7 percent, respectively.
Hong Kong-listed shares of Chinese banks outperformed, up 1.4 percent.
The Hang Seng Tech, meanwhile, extended losses, sliding 0.9 percent to end the month down nearly 10 percent. Despite the big monthly drop, China and Hong Kong markets outperformed other major Asian markets in March.
Some analysts believe the country is a relative safe haven given its low dependence on Gulf energy.
HSBC remained “overweight” on China shares in a note on Tuesday, adding that the market offers defensive qualities underpinned by a largely domestic investor base and a stable currency.
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