China stocks dip to one-month lows on Gulf tensions, profit-taking
- Shanghai Composite index was down 1.5% at 3,934.74, its lowest level since June 8
HONG KONG: Chinese stocks slid across the board on Monday, dragging the benchmark indexes to one-month lows, as escalating U.S.-Iran tensions dented risk appetite and triggered profit-taking in some sectors.
By the midday break, the Shanghai Composite index was down 1.5% at 3,934.74, its lowest level since June 8. The blue-chip CSI300 index fell 1.3%, also hovering near a one-month low.
Losses were broad-based, with the defence sector index down 5%, the rare earth sector down 5.6% and satellite stocks down 3.6%.
Tech shares also gave back some of their stellar gains, with the CSI AI dropping 1.9% and the CSI Semiconductors Index down nearly 2%.
Small-cap shares tracked by the CSI 2000 Index fell 4.1%, on track for their biggest single-day drop since March.
In contrast, defensive sectors including banks, energy, and consumer staples rose between 0.3% and 1.5%.
U.S. and Iranian forces exchanged heavy missile and drone assaults, with Tehran targeting U.S. assets in six countries and saying it had again closed the Strait of Hormuz, which pushed Asian equities lower.
Hong Kong stocks log strongest week in 9 months
“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 adjustment, they added.
In Hong Kong, the benchmark Hang Seng Index was down 0.1%, and the Hang Seng Tech Index dropped 0.8%.
Investors are awaiting trade data and second-quarter GDP this week, which will provide more clues on the health of the world’s second-largest economy.
China’s exports in June are forecast to have risen 18.2% year-on-year in dollar terms, according to 20 economists in a Reuters poll, cooling from 19.4% in May.
Comments