SHANGHAI: China and Hong Kong stocks declined on Friday, tracking their regional peers, pressured by reports of an Israeli attack on Iran that sparked rising safe-haven bets.

The latest developments prompted concerns over a widening of the Israel-Hamas war in Gaza to include other countries in the Middle East, causing investors to rush to sweep up typical safe-haven assets.

Initial US news reports late on Thursday said Israel launched missiles at Iran in retaliation for an April 13 attack on Israel that was in response to an alleged Israeli assault that killed Iranian military leaders on April 1. Iranian officials on Friday told Reuters there was no missile attack.

“It’s a big dampener on risk assets, including equities and most currencies,” said Christopher Wong, currency strategist at OCBC Bank.

At the close, the Shanghai Composite index was down 0.29% at 3,065.26 points, while the blue-chip CSI 300 was down 0.79%.

The financial sector, consumer staples, real estate and healthcare fell between 0.44% and 1.55%.

The smaller Shenzhen index ended down 0.73% and the start-up board ChiNext Composite index was weaker by 1.762%.

The Hang Seng index closed 161.73 points or 0.99% lower at 16,224.14. The Hang Seng China Enterprises index fell 0.99% to 5,746.61.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.64%, while Japan’s Nikkei index closed down 2.66%.

The yuan was quoted at 7.2409 per US dollar at 08:32 GMT, 0.04% weaker than the previous close of 7.2382.