China stocks fall as geopolitical tensions outweigh positive data

Chinas stock markets ended Tuesday lower, with the Shanghai Composite slipping 0.8% to 3,892 and the Shenzhen Component dropping 1.8% to 13,478. Both indexes recorded their worst monthly performance since January 2024, as ongoing conflict in the Middle East continued to weigh on investor sentiment.

Earlier in the session, markets found some support after data showed improvement in Chinas economy. Manufacturing activity rose to a one-year high, while the services sector also returned to growth, pointing to a broader recovery.

Despite this, investors remained cautious due to geopolitical uncertainty. Concerns increased after US President Donald Trump indicated a possible halt to US operations against Iran without reopening the Strait of Hormuz, while Iran reportedly targeted a Kuwaiti oil tanker near Dubai.

 

Energy stocks, however, stood out with strong gains for the month. PetroChina jumped 12.3%, marking its best monthly performance since October 2025, while CNOOC rose 11.5%, its strongest since January. Both companies benefited from rising oil price expectations linked to the Middle East tensions.

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