Chinese, HK stocks fall on Middle East conflict

Foshan Haitian Flavouring and Food Co

19/06/2025 09:24

Updates prices, adds quotes

HONG KONG, June 19 (Reuters) - Stocks in China and Hong Kong tumbled on Thursday as mounting conflict in the Middle East rattled investor confidence, fuelling a broad selloff across sectors.

** Sentiment across the region remained weak as geopolitical conflicts showed no sign of easing, with Iran and Israel exchanging further air strikes on Thursday, while the U.S. weighed the possibility of joining the attacks on Iran.

** Meanwhile, this week's much-hyped Lujiazui Forum in Shanghai offered few fresh measures to bolster the market, also leaving investors in search of policy direction.

** The market is now "switching back to defensive mode", with indexes and volume both weak, analysts at Goldman Sachs said in a client note.

** At market close, China's blue-chip CSI300 index .CSI300 and the Shanghai Composite index .SSEC were both down 0.8%.

** Weakness was across the board, with the CSI rare earth sector sub-index .CSI930598 down 1.9%, the real estate index .CSI000952 down 1.7% and the defence sub-index .CSI399959 down 1.8%.

** Declines were sharper in Hong Kong. The Hang Seng Index .HSI slid 2% - its biggest single-day retreat since April 7.

** Tech .HSTECH and healthcare .HSCIH sectors were among biggest losers, down 2.4% and 3.2% respectively.

** Elsewhere, seasoning maker Foshan Haitian Flavouring 3288.HK surged as much as 4.7% in its first day of trading in Hong Kong.

** Though sentiment has improved after a Sino-U.S. trade truce last month in Geneva, China's long-term prospects remain in doubt, according to the Bank of America's latest fund manager survey.

** The survey noted that most fund managers in Asia still expect a structural de-rating to get underway in the world's second-largest economy.

 (Reporting by Jiaxing Li in Hong Kong. Editing by Janane Venkatraman and Mark Potter)

 ((jiaxing.li@thomsonreuters.com; +852 63358304))