SHANGHAI: Chinese stocks ended lower on Tuesday, reversing morning gains, as markets remained risk-off amid fresh geopolitical uncertainties. Hong Kong shares were roughly flat.
China’s blue-chip CSI300 Index closed 0.7 percent down, while the Shanghai Composite Index dropped 0.9 percent. Hong Kong benchmark Hang Seng was up 0.1 percent.
Iran launched fresh attacks on the United Arab Emirates on Tuesday, the kind of strikes on US Gulf allies that President Donald Trump said had not been expected, but which sources said he had been warned about before the conflict.
Shares in the onshore coal and oil & gas sectors fell 2.3 percent and 1.6 percent, respectively, despite oil prices rising on renewed supply fears.
The Hang Seng Tech Index was roughly flat on Tuesday, after hitting its lowest level in nearly a year earlier this month. Investors eye Tencent’s annual results, due on Wednesday, to gauge its AI growth, which could influence the index.
Hong Kong shares, particularly the Hang Seng Tech Index, had built up sizable short positions during the recent selloff, analysts at Huatai Securities said in a note.
With equity volatility rising globally, the risk-reward for leveraged long-short bets has deteriorated, prompting short covering over the past two weeks that helped put a floor under the market, analysts added.
Financial shares outperformed among declines, with onshore financials up 1.2 percent and offshore peers up 0.6 percent. Insurance names climbed 2 percent.
Shares of Bright Smart Securities surged 47 percent after Ant Group said it had received regulatory approval to acquire a controlling stake in the company.
Jewellery group Chow Sang Sang rose as much as 13 percent, marking its largest one-day gain in seven months on the back of a robust earnings forecast.