Geopolitical Tensions Weigh on Chinese and Hong Kong Markets

Mainland China and Hong Kong stocks declined as geopolitical tensions in the Middle East escalated following Israeli strikes on Iran. Safe-haven assets surged, with gold and miners advancing. Major Chinese indices are set for weekly losses despite eased U.S.-China trade tensions. The yuan weakened amid demand for the U.S. dollar.

Mainland China and Hong Kong stocks fell on Friday, tracking regional losses as investors sought safe-haven assets due to escalating Middle East tensions sparked by Israeli strikes on Iran. Israel targeted Iranian nuclear facilities, missile sites, and military leaders, marking the start of a prolonged operation against Tehran's atomic ambitions.

The Shanghai Composite dipped 0.72% to 3,378.01, while the CSI300 dropped 0.76% to 3,862.75. In Shenzhen, the local index declined by 1.27%, with the ChiNext Composite and STAR50 indexes also reporting losses. Hong Kong's Hang Seng Index downed 0.7% to 23,866.86, and the Hang Seng China Enterprises Index fell 0.89% to 8,651.84.

Despite stock downturns, gold and mining sectors rose over 2%, and oil and gas shares saw a midday jump of 2.05%. The U.S. dollar's safe-haven appeal weakened the yuan by 0.13%. Although U.S.-China trade tensions have eased, China's fragile macroeconomic outlook hinders stock growth without clear policy intervention.

(With inputs from agencies.)