Global Markets | Shanghai stock index steady after 1% slide as Mideast tensions weigh

China and Hong Kong stocks tumbled on Monday, joining a broader sell-off in the region, as the escalating conflict in the Middle East continued to dent risk appetite.

** The Shanghai Composite Index lost as much as 1% before recouping the losses and trading 0.2% higher to 3,922.72 at the midday trading break.

** ‌The blue-chip ⁠CSI 300 ⁠Index declined 0.2%.


** Hong Kong benchmark Hang Seng was down 0.9%, and the Hang Seng Tech Index lost 1.7%.

** Broader Asian equities also slid on Monday; MSCI's Asia ex-Japan stock index was weaker by 1.5% and Japan's Nikkei index was down 3.4%.

** Hopes of Gulf peace talks were overshadowed by uncertainties as the U.S. builds up ground troops, while ⁠attacks on Israel ‌by Yemen's Iran-aligned Houthis further complicated the war.

** "With Middle East tensions rising over the weekend, markets now face headwinds from both ⁠geopolitical risks and weak technical signals, making a sharp turnaround unlikely for the near term," analysts at Nanhua Futures said in a note.

** Still, expectations of supportive domestic policy measures provide a floor, and downside is limited following previous corrections at the beginning of the year, Nanhua analysts added.

** The benchmark Shanghai Composite Index has slipped 6.7% so far in March, which has largely wiped out ‌all the year-to-date gain and put the index on track for the worst monthly drop since January 2024.

** However, Chinese equities still prove to be more resilient ⁠compared with other markets in the region, and that relative outperformance is set to become increasingly pronounced as the war drags on, analysts at BNP said in a note.

** The bank maintains its preference for China's materials, industrials, and technology sectors within the medium- to longer-term horizon.

** Among best performers, the gold sector index added 2.8%, the defences sector index climbed 1.3% and the energy sector added 1.1%.

** The CSI New Energy Index declined 1.6%.