HONG KONG: Chinese stocks declined on Tuesday as investors rushed to sell companies with exposure to the Middle East, while the Hong Kong market gained driven by dovish comments from US Federal Reserve officials.
China’s blue-chip CSI 300 Index dropped 0.75%, while the Shanghai Composite Index fell 0.70%.
Hong Kong’s Hang Seng Index rose 0.84%, and the Hang Seng China Enterprises Index climbed 0.90%.
Broader Asian shares rose on Tuesday following Wall Street’s high note overnight. Top Fed officials indicated on Monday that rising Treasury yields could mean less need for the policymakers to raise rates further.
In mainland China, however, concerns around the clashes between Israel and the Hamas group are mounting among investors, as they flocked to investor relations platforms to ask listed companies about the war’s potential impact and dumped shares in relevant firms.
CSI Construction Engineering Index slumped 4.2%, led by an 8.5% tumble in state-owned China Communications Construction which signed contracts worth $3 billion in the Middle East in the past three years. China Railway Group retreated 7.8%.
China’s belt and road-related stocks also fell 2%.
Meanwhile, China said its Commerce Minister Wang Wentao and US senators led by Senate Majority Leader Chuck Schumer held “rational and pragmatic” discussions on Monday.
In Hong Kong, sentiment is marginally picking up due to the attractive valuation, analysts say.
“As the focus turns to Q3 earnings, selling may have been exhausted somewhat and upside surprises in upcoming earnings may trigger a tradable rally,” said Redmond Wong, Greater China market strategist at Saxo Markets.
Hong Kong-listed tech giants jumped 1.3% by the midday break.
Country Garden extended losses and closed down over 10% after the embattled property developer said it might not be able to meet all of its offshore payment obligations when due or within the relevant grace periods.
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