The Shanghai Composite dropped 0.8% to close at 3,892, while the Shenzhen Component fell 1.8% to 13,478 on Tuesday, with both benchmark indices posting their worst monthly performance since January 2024, as a month-long Middle East conflict continued to cast a shadow over market sentiment. Earlier, optimism had emerged in China after official data showed the manufacturing PMI rose to a one-year high of 50.4, while the non-manufacturing PMI edged up to 50.1, suggesting renewed growth across both sectors.
However, caution prevailed after President Trump signaled a potential end to US operations against Iran even without reopening the Strait of Hormuz, while Iran struck a Kuwaiti oil tanker near Dubai. Energy stocks posted strong monthly gains, led by PetroChina, which surged 12.3% to its best month since October 2025, and CNOOC, climbing 11.5% to its strongest monthly performance since January. Both benefited from a bullish oil outlook amid ongoing Middle East tensions.
