China and Hong Kong Stocks Hit by Market Caution Amid Middle East Tensions

China and Hong Kong stocks faced a grim trading session on Tuesday as they continued to suffer their biggest monthly losses since early 2024. Investor caution prevailed despite data showing a positive uptick in China's manufacturing activity.

The Shanghai Composite Index fell by 0.38%, and the blue-chip CSI300 Index dipped by 0.58% by midday. Meanwhile, Hong Kong's Hang Seng Index decreased by 0.51%, with both indexes bracing for their largest drop since January.

The decline can be attributed to fears of a global economic slowdown and potential supply chain disruptions arising from Middle East tensions, overshadowing encouraging domestic economic figures. Furthermore, energy and semiconductor stocks, alongside technology shares, led the downturn in mainland markets.