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
