The Shanghai Composite Index fell 1.9% to around 3,880 and the Shenzhen Component Index lost 1.3% to 13,690 on Monday, with mainland shares sliding to three-month lows as escalating tensions in the Middle East weighed on global equity markets. The conflict involving the US, Israel, and Iran entered its fourth week with no sign of de-escalation: President Donald Trump threatened strikes on Iranian power plants if the Strait of Hormuz is not reopened, while Tehran warned it would retaliate by targeting key US and Israeli assets in the region if its energy infrastructure is attacked.
Persistently elevated oil prices have intensified inflation concerns and strengthened expectations of further interest rate hikes by major central banks, while simultaneously darkening the outlook for global economic growth. Technology shares led the downturn in China, with notable declines in Eoptolink Technology (-1.7%), Zhongji Innolight (-2.9%), Huagong Tech (-1.2%), Victory Giant (-4.6%), and Suzhou TFC Optical (-3.6%).
