The Chinese stocks closed lower on Monday as the latest Middle East developments added more uncertainty to the market, said China Global Television Network (CGTN) analyst Timothy Pope.
The benchmark Shanghai Composite Index was down 2.06 percent to 3,913.79 points, with the Shenzhen Component Index closing 3.48 percent lower at 14,522.85 points.
The drop was influenced by the strikes traded between U.S. and Iran, which have fueled the doubts about the interim agreement they signed a few weeks ago, according to Pope.
"The Shanghai Composite Index was down more than 2 percent and the Shenzhen Component was off 3.5 percent. The market was already taking profits on tech stocks, and the latest Middle East developments have added to the uncertainty and made a return to a sustained rally look a little bit unlikely for the moment - the Shanghai Composite is already looking a little bit range-bound around 4000 points," the analyst said.
However, several important economic benchmarks will be released in a few days and are expected to further shape market outlook.
"For the week ahead, the markets are going to be waiting on a lot of big-ticket Chinese economic data. The second quarter GDP numbers will be out mid-week. Ahead of that, we should also see the trade data - which is expected to continue pretty strong - and fixed asset investment and retail sales data as well - which have been fairly soft recently and will be closely watched for whether or not things there are improving," Pope noted.
China stocks fall due to uncertainty in Middle East situation: analyst
The weak performance of tech stocks has dragged on Asian stocks, said China Global Television Network (CGTN) analyst Timothy Pope.
Hong Kong's stock market ended mixed Monday with the benchmark Hang Seng Index up 0.16 percent to close at 24,213.72 points.
The Hang Seng China Enterprises Index gained 0.33 percent to end at 8,065.97 points, and the Hang Seng Tech Index decreased by 0.96 percent to end at 4,676.43 points.
"Energy, industrials and consumer stocks did a lot of the heavy lifting for the Hang Seng in Hong Kong today, while we saw tech stocks dragging and that was a story around the region really. Recent index addition MiniMax tanked by 17 percent to close at a record low. Its shares have been falling since a huge chunk of outstanding shares came out of post-IPO lockup last week, but today the AI company stock sank below its market debut price for the first time," Pope said.
Tokyo stocks closed lower on Monday, while the benchmark Nikkei index, the 225-issue Nikkei Stock Average, dropped 1,315.00 points, or 1.92 percent.
"Over in Tokyo today the Nikkei225 was down 1.9 percent. Worries about rising oil prices really added to the tension there. There's worry that that's going to fuel company cost rises. Investors seemed a little bit more sensitive to that today as we head into financial reporting season in Japan. AI chain-related stocks retreated again. Heavyweights Tokyo Electron and Advantest were dragging on the Nikkei. There were also some gains, though, for financial and banking stocks, suggesting that perhaps investors are rotating out of AI shares for the moment," said Pope.
Tech stocks drag on Asian markets: analyst
