Geopolitical Tensions Roil Asian Markets Amid Energy Surge

China and Hong Kong stocks declined as investor risk appetite deteriorated due to ongoing hostilities in the Middle East, affecting the CSI300 and Hang Seng indices. Energy stocks bucked the trend, spiking due to rising oil prices. Mainland metal and tech stocks weakened, reflecting investor caution amid geopolitical instability.

China and Hong Kong stocks experienced a downturn on Thursday as rising geopolitical tensions in the Middle East curbed investor risk-taking. The CSI300 Index dropped by 1% while the Shanghai Composite Index lost 0.6%, and the Hang Seng fell by 1.2% as concerns over the United States-Israel and Iran conflicts lingered.

Despite the broader market losses, energy shares rose sharply. Onshore and offshore energy gauges climbed 2.3% and 2.8%, respectively, following a surge in Brent crude prices past $100 a barrel. Iran's increased attacks on oil and transport facilities, including the burning of two tankers in Iraqi waters, contributed to this spike, causing speculation about a potential rise to $200 a barrel.

In contrast, onshore non-ferrous metal and AI stocks slipped 1.6% and 1.4%, respectively. The CSI Rare Earth Index also saw a 2% decline. Meanwhile, shares of Guotai Junan International and Citic Securities in Hong Kong fell after authorities conducted raids on the brokerages earlier this week, impacting investor confidence further.