China stocks fall sharply as geopolitical tensions rattle markets

Mainland Chinese stock markets dropped heavily on Monday, hitting their lowest levels in about three months. The Shanghai Composite Index fell 3.63% to 3,813, while the Shenzhen Component Index lost 3.76% to end at 13,346. The decline came as investors grew nervous about escalating conflict in the Middle East. The ongoing tensions involving the US, Israel, and Iran have increased uncertainty, especially with threats to energy infrastructure and key shipping routes like the Strait of Hormuz. This has pushed oil prices higher, raising worries about inflation and the possibility that central banks may keep interest rates elevated for longer. Technology stocks were among the biggest losers, with several companies seeing notable declines during the session. On the other hand, shares of energy-related companies, including oil and coal firms, as well as some electric vehicle makers, performed better as higher energy prices are expected to support their earnings. Overall, concerns about rising costs and slower global growth weighed on market sentiment, leading to broad-based selling.

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