China, Hong Kong stocks give up gains as Middle East tensions flare

China and Hong Kong stocks turned negative on Friday, as investors worried about heightening geopolitical tensions in the Middle East after U.S. air strikes killed a top Iranian commander.

** The Hang Seng index fell 0.2% to 28,495.11, after climbing as much as 1.2% to a six-month high, while the Hong Kong China Enterprises Index lost 0.3% to 11,291.30. ** On the mainland, the CSI300 index dropped 0.4% to 4,135.46 at the end of the morning session, while the Shanghai Composite Index lost 0.3% to 3,076.01.

** Iranian Major-General Qassem Soleimani, head of the elite Quds Force and top Iraqi militia commander Abu Mahdi al-Muhandis were killed early on Friday in a U.S. air strike on their convoy at Baghdad airport, the Pentagon and Iran said. ** The tensions in the Middle East after the U.S. air strike was the main reason that knocked Hong Kong stocks off from a six-month high, Ample Finance Group analyst Alex Wong said.

** Investors flocked to gold for shelter, pushing the precious metal to a four-month high. ** Besides, market participants also tended to pocket gains after a recent rally, Wong added.

** The benchmark Hang Seng index had advanced 7% in the last month of 2019 amid signs of progress in Sino-U.S. trade talks. ** In China, worries over corporate earnings surfaced as companies began to publish annual estimates for 2019 and 2020, denting sentiment further for markets in the country.

** The world's most valuable liquor maker Kweichow Moutai dropped 4% to a near four-month low, extending its sharp correction from Thursday, after the consumer giant forecast full-year profit below estimates. ** There could be other blue-chip companies whose earnings estimates might disappoint, China Fortune Securities' analyst Yan Kaiwen said.

** Around the region, MSCI's Asia ex-Japan stock index fell 0.09%. ** The yuan was quoted at 6.9678 per U.S. dollar, 0.05% weaker than the previous close of 6.9643.

** By 0402 GMT, China's A-shares were trading at a premium of 26.45% over the Hong Kong-listed H-shares.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)