China stocks fall as Iran de-escalation uncertainty weighs
By Summer Zhen
HONG KONG, March 26 (Reuters) - China and Hong Kong stocks dropped on Thursday, as investors weighed the prospects of a de-escalation in the Middle East conflict.
At the close, China's blue-chip CSI300 Index .CSI300 fell 1.3%, while the Shanghai Composite Index .SSEC dipped 1.1%.
Hong Kong's benchmark Hang Seng .HIS lost 1.9%.
President Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister who said his country was reviewing a U.S. proposal but had no intention of holding talks.
Market participants said regional stocks, including China, struggled for direction amid uncertainty over the direction of the war.
"We have not been adding on the dips (given market volatility)", said Daniel Tan, portfolio manager at Grasshopper Asset Management.
Major sectoral indexes fell, with cloud computing .CSI931469 and insurance .CSI399809 leading the decline, down 3.2% and 3%, respectively.
Energy stocks .CSIEN, however, outperformed, gaining 0.9%.
In Hong Kong, the Hang Seng Tech index .HSTECH tumbled 3.3%, with heavyweight Kuaishou 1024.HK slumping 14%.
Meanwhile, Trump plans to meet Chinese President Xi Jinping in May, a closely watched trip postponed due to the ongoing Iran war. Trump has sought support from the world's major oil consumers, including China, to help reopen the Strait of Hormuz.
Goldman Sachs analysts remained overweight on Chinese equities, despite higher-for-longer energy prices caused by the Middle East conflict.
The bank slightly trimmed 2026 earnings growth forecast for both mainland and Hong Kong shares by 1 percentage point to 12%, to reflect the modest impact from oil supply shock, adding the country is "relatively well-insulated" from rising energy prices.
Separately, Reuters reported on Thursday China is considering to ease shareholding restrictions to broaden capital-raising options for commercial banks reeling from an economic slowdown, citing sources.
The smaller Shenzhen index .SZSC was down 0.64%, the start-up board ChiNext Composite index .CNT was weaker by 0.07% and Shanghai's tech-focused STAR50 index .STAR50 was down 1%.
