Shanghai Composite stumbles as Middle East turmoil fuels investor caution: analyst

Shanghai Composite Index closed 1.2 percent lower on Friday, as escalating tensions in the Middle East fueled investor caution and offset a brief recovery to the 4,000-point level, according to Timothy Pope, a market analyst for China Global Television Network (CGTN).

Chinese stocks closed lower on Friday, with the benchmark Shanghai Composite Index down 1.24 percent to 3,957.05 points.

"Shanghai Composite might actually regain the 4,000 point level which it lost the other day - actually at one point the index did climb back to that level but it slipped back again before the close, and the index ended 1.2 percent lower. The Middle East war is looking like it could start to impact prices here more directly - although analysts are mostly agreed that China is among the better placed countries to withstand the economic shock generated by the war. That's naturally making investors more cautious - if factory gate prices are poised to rise thanks to input costs, it's going to put pressure on a lot of company profit margins - even more so if the war depresses global demand for Chinese products. That's naturally again generating some cautions. Today they were also assessing the central bank's decision to leave interest rates unchanged - although that was widely expected," he said.

The analyst also reported the surge of solar stocks, which highlights continued demand for Chinese renewable energy products despite broader geopolitical and economic headwinds.

"Every sector was broadly lower today with materials, tech and consumer stocks all getting hit pretty hard. The one big exception was solar stocks. Investors latched onto this one after a media report saying Tesla is looking to buy almost 3 billion U.S. dollars worth of solar equipment from Chinese companies including one company particular Suzhou Maxwell technologies. That one ended up more than nine percent higher after Reuters carried the story and the index as a whole was up around three percent," he said.

Shanghai Composite stumbles as Middle East turmoil fuels investor caution: analyst

At least 20 people were killed and 57 others injured in Israeli airstrikes across Lebanon over the past 24 hours, according to official figures released on Friday.

The latest casualties bring the cumulative death toll to 1,021, with a total of 2,641 people wounded since the escalation of hostilities on March 2.

Meanwhile, displacement continues to rise sharply as ongoing strikes force more residents to flee their homes. A total of 134,616 displaced people are currently sheltering in 644 centers across the country, the figures show.

Efforts to accommodate displaced populations remain under strain as the humanitarian situation deteriorates amid continued airstrikes.

Hezbollah entered the confrontation on March 2 by launching rockets from southern Lebanon toward Israel for the first time since a ceasefire on Nov. 27, 2024, prompting Israel to carry out an intensified military campaign targeting multiple areas across the country.

Israeli airstrikes in Lebanon kill 20, bring total fatalities to 1,021