HONG KONG: China and Hong Kong stocks closed flat on Monday as the collapse of US-Iran peace talks dampened risk appetite across the region.
The Shanghai Composite Index–– gained less than 0.1 percent to 3,988.56 at market close, and the blue-chip CSI300 Index added 0.2 percent, both clawing back from steep losses at the opening hour.
Hong Kong’s benchmark Hang Seng lost 0.9 percent to 25,660.85. The Hang Seng Tech Index was down 0.8 percent.
Around the region, MSCI’s Asia ex-Japan stock index was 0.8 percent lower.
The US military said it would begin a blockade of all maritime traffic entering and exiting Iranian ports and coastal areas on Monday after weekend talks failed to reach a deal to end the war in Iran, jeopardizing a fragile two-week ceasefire.
“Ongoing geopolitical tensions are making it hard for the market to break out of its current slump,” analysts at Soochow Futures wrote in a note. “High volatility and choppy, range-bound trading are likely to persist for the near term.”
Still, China’s domestic economic recovery remained intact with factory-gate prices rising for the first time in more than three years in March, they added.
Investors are also awaiting key China macro data releases this week, including trade data on Tuesday, March credit figures and Q1 real GDP.
“China looks relatively attractive given the domestically orientated nature of its economy and equity markets, as well as valuations and risks to current earnings expectations,” analysts at BNP Paribas said in a note.
“If the situation remains uncertain and energy prices stay elevated, then we would expect this outperformance to continue.”
Among winning sectors, the CSI New Energy Index added 1.9 percent and the CSI New Energy Vehicle Index climbed 1.7 percent. The CSI 300 Energy Index gained 0.5 percent.
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