HONG KONG: China and Hong Kong stocks finished lower on Wednesday, as geopolitical tensions ahead of the first anniversary of Russia’s invasion of Ukraine and Wall Street selloff overnight dragged the markets.

China’s blue-chip CSI300 Index lost 0.90%, while the Shanghai Composite Index dipped 0.47%.

The Hang Seng Index was down 0.51%, while the Hang Seng China Enterprises Index dropped 1.33%.

Wider Asian share markets followed Wall Street into the red as surprising strength in global surveys of services stoked fears that central banks would have to lift rates further.

US President Joe Biden and Russian President Vladimir Putin have been sparring verbally, presenting starkly different views of the world and the Ukraine war — Biden promising to defend democracies and Putin asserting the West was a threat to Russia.

China’s top diplomat told one of Putin’s closest allies on Tuesday Beijing’s relationship with Moscow was “rock solid”. Chinese leader Xi Jinping is preparing to visit Moscow for a summit with Putin in the coming months, the Wall Street Journal reported.

In Hong Kong, Financial Secretary Paul Chan said the city’s economy is expected to rebound 3.5%-5.5% this year after shrinking 3.5% in 2022.

Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs maintains a positive view on Chinese equities, highlighting the stocks are still trading 40-45% below the peak in early 2021.

“The valuation is about 10.8 times earnings, which has come back to levels that are certainly much more reasonable and affordable,” Moe told a media briefing, adding that China A-shares would have the lowest correlation to US equity weakness within Asia.

Telecom stocks lost momentum, falling 2.3% to lead the decline, new energy vehicles slid 1%.