China stocks dip to three-month lows on Gulf tensions, profit-taking
- The Shanghai Composite index closed down 2.1% at 3,913.79, its lowest level since April 7
HONG KONG: Chinese stocks slid across the board on Monday, dragging the country’s benchmark indexes to three-month lows, as escalating U.S.-Iran tensions dented risk appetite and triggered profit-taking in some sectors.
The Shanghai Composite index closed down 2.1% at 3,913.79, its lowest level since April 7. The blue-chip CSI300 index fell 1.8%, also hovering near a three-month low.
Losses were broad-based, with the defence sector index down 6.9%, the rare earth sector down 6.7% and the satellite sector down 7.6%.
Tech shares also gave back some of their major gains, with the CSI AI index dropping 3% and the CSI Semiconductors Index down nearly 4%.
Small-cap shares tracked by the CSI 2000 Index fell 5.7%, their biggest single-day drop since April 2025.
In contrast, defensive sectors including banks, energy, and consumer staples rose between 0.2% and 1.7%.
Hong Kong stocks log strongest week in 9 months
U.S. and Iranian forces exchanged heavy missile and drone assaults, with Tehran targeting American assets in six countries and saying it had again closed the Strait of Hormuz, pushing Asian equities lower.
“With weak domestic demand combined with strong profit-taking sentiment in certain sectors, the market is unlikely to stage a sustained sharp rally and range-bound fluctuation will remain the dominant trend,” Nanhua Futures said in a note.
Blue chips are likely to retain their relative advantage, as their defensive characteristics stand out and offer certain benefits during market corrections, while small- and mid-caps are likely to see further valuation adjustments, they added.
In Hong Kong, the benchmark Hang Seng Index was 0.2% higher and the Hang Seng Tech Index dropped 1%.
Investors are awaiting trade data and second-quarter Chinese GDP this week, which will provide more clues on the health of the world’s second-largest economy.
China’s exports for June are forecast to have risen 18.2% from a year earlier in dollar terms, according to 20 economists surveyed by Reuters, cooling from 19.4% in May.
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