China’s stocks have been range-bound this month after key benchmarks rose nearly 20% this year. (Reuters pic)
SHANGHAI: China and Hong Kong equities slipped today as investors turned cautious on heightened tensions between Beijing and Tokyo over the weekend and opted to lock in profits following a recent rally.
China’s blue-chip CSI300 Index was down 0.7% by midday, while the Shanghai Composite Index lost 0.4%.
Hong Kong’s benchmark Hang Seng Index slipped nearly 1%.
So far this year, the Hang Seng Index has gained 30% and the CSI300 has climbed 17%.
The row erupted after Japan’s Prime Minister Sanae Takaichi told Japanese lawmakers that a Chinese attack on Taiwan could threaten Japan’s survival and potentially trigger a military response, something officials had long avoided airing in public for fear of provoking Beijing, which claims the self-ruled island.
A senior Japanese diplomat will head to China today, according to Japanese media, as Tokyo tries to calm an escalating diplomatic spat over Taiwan that is straining relations between the East Asian neighbours.
Shares of Chinese software maker Linkage, which derives most of its sales from Japan, fell as much as 4% to their lowest level since July 24.
The CSI Rare-Earth Index was roughly flat even after US treasury secretary Scott Bessent said in remarks that aired yesterday that a rare-earths deal between Washington and Beijing will “hopefully” be done by Thanksgiving.
Bucking the sombre mood, shares of onshore artificial intelligence firms edged 0.5% higher, while new energy vehicle firms rose 1.2%.
China’s stocks have been range-bound this month after key benchmarks rose nearly 20% this year.
“We view 2026 as a year of stabilisation after 2025’s high returns, Morgan Stanley analysts said in a note.
“Index upside is modest with moderate earnings per share (EPS) growth and valuation settling at a higher regime, as China reclaims its footing in the global tech race and trade tension abates,” the analysts said.
The CSI defense index was up 1.2%.
Tech majors traded in Hong Kong were down 1.2%.
Such a simple yet powerful message. Thanks for this.
I’ll definitely come back and read more of your content.