HK, mainland stocks end down on vicious cycle in Gulf

Hong Kong and mainland stocks closed lower on Tuesday due to investors' reassessment of the potential end to the US-Iran conflict, which has driven up global oil prices. The Hang Seng Index dropped 284 points, or 1.1 percent, to 25,652, while the tech index fell 95 points, or 1.9 percent, to 4,824. The China Enterprises Index also decreased by 93 points, or 1.1 percent, to 8,528.

Material shares were among the biggest drivers of the decline, with the Hang Seng material sub-index slipping 4.6 percent. On the mainland, the Shanghai Composite Index fell 32 points, or 0.82 percent, to 3,934, ending a five-day winning streak. The blue-chip CSI300 index also declined by 0.8 percent. The Shenzhen Component Index fell by 57 points, or 0.4 percent, to close at 14,259, while the ChiNext Index rose by 11 points, or 0.34 percent, to 3,549.

Non-ferrous metal stocks led the decline, with a sub-index tracking the sector dropping 4.7 percent. Unitree, a robot maker, reported that its US$900 million Shanghai initial public offering was 8,000 times more oversubscribed by retail investors, indicating significant investor interest. In Seoul, the Kospi ended the day up for a second consecutive session, gaining 45 points, or 0.73 percent, to 6,345, as chipmakers benefited from strong exports.

The losses were attributed to President Donald Trump's response to Iran's conditions for a peace deal, in which he demanded Iran pay compensation for individuals killed in wars, attacks, and protests. This move escalated tensions and further complicated efforts to reopen the Strait of Hormuz. Oil prices surged over two percent to record highs as hopes for a US-Iran deal to end the war and restore the Strait of Hormuz faded.