The Shanghai Composite Index fell 0.9% to below 4,030 on Thursday, while the Shenzhen Component declined 1.6% to 13,960, with both benchmarks hitting multi-week lows as the war involving Iran intensified concerns over global energy supplies. Iran launched missile strikes on a Qatari facility that houses the world’s largest LNG export plant, one of several energy assets Tehran had threatened to target following an Israeli strike on Iran’s South Pars gas field.
In response, China plans to draw on its strategic oil reserves to cushion the impact of disruptions in the Middle East, with refiners expected to process as much as 1 million barrels per day over the next four to six weeks.
Mainland equities also tracked overnight losses on Wall Street, weighed down by hotter-than-expected US producer price index (PPI) data and higher inflation projections from the Federal Reserve, which further reduced the likelihood of imminent interest rate cuts. Major heavyweight stocks posted steep losses, including Zijin Mining (-5.3%), Biwin Storage (-4.6%), and Giga Device Semiconductor (-3.6%).
