China Stocks Dive Amid Global Market Fears and Middle East Conflict

China's stock market plummeted on Friday following weak global markets and softer-than-expected U.S. factory activity data. Additional factors influencing market sentiment included the Middle East conflict and China's fragile economic recovery. The Shanghai Composite index saw a significant drop, with key sub-indices and other regional markets also experiencing declines.

China stocks closed sharply lower on Friday, following a global market downturn spurred by weaker-than-expected U.S. factory activity data. Fears of a broader economic downturn grew after the new orders index hit an eight-month low. Regional tensions also played a role, particularly after escalated conflicts in the Middle East.

The Shanghai Composite index fell 0.92%, marking its biggest one-day loss since late July, with financial, real estate, and technology sectors taking hits. The Hang Seng index likewise experienced a steep drop, closing down by 2.08%. Notably, China's second-quarter growth and manufacturing activity reports added to investor trepidations.

Analysts highlighted that investors are flocking to safer assets amid increasing concerns over the global economy. The MSCI's Asia ex-Japan stock index was down 2.38%, and Japan's Nikkei index plummeted by 5.81%, reflecting the widespread uncertainty affecting markets far beyond China.

(With inputs from agencies.)