Stock Markets Surge Amid U.S.-Iran Tensions: China and Hong Kong Lead Gains

China and Hong Kong stocks rose following a delay in U.S. action against Iran. China's CSI300 Index and Shanghai Composite saw gains, influenced by 'productive' U.S.-Iran discussions. Defensive financial stocks led onshore growth, while tech majors and materials stocks in Hong Kong also improved.

China and Hong Kong stocks experienced a rise on Tuesday after President Donald Trump postponed a strike on Iran's power grid. This decision briefly boosted risk appetite, although investors remained cautious amidst Iran's denial of any ongoing negotiations.

China's CSI300 Index climbed 0.7% by lunch, and the Shanghai Composite Index increased by 1%. Hong Kong's Hang Seng saw a rise of 1.8%. Despite these advances, some market gains were retraced following Iran's statement that no talks were in progress, even as Trump referred to discussions as 'productive.'

The Monday selloff had driven China and Hong Kong benchmarks down more than 3%, their sharpest decline since last year's tariff conflicts. However, defensive financial stocks rose 1.4%, leading gains onshore. Materials and tech stocks in Hong Kong also showed recovery, with major companies posting significant profits.