26.05.202601:58:29UTC+00China Stocks Retreat as Deal Optimism Falters

The Shanghai Composite fell 0.6% to 4,130 on Tuesday, while the Shenzhen Component dropped 1.2% to 15,677, with both indices pulling back from the previous session as renewed US military action in the Middle East dampened hopes for a near-term peace deal. US forces launched strikes in southern Iran on Tuesday, describing them as defensive operations, even as Washington and Tehran were reportedly edging closer to a potential agreement aimed at easing tensions and reopening the Strait of Hormuz.

At the same time, Chinese investors are increasingly turning to alternative channels to trade overseas equities after Beijing intensified its crackdown on illicit cross-border stock transactions in a bid to stem capital outflows. On the corporate front, notable decliners included Foxconn Industrial Internet (-2.3%), Hygon Information Technology (-2.9%), Luxshare Precision Industry (-2.9%), and Sungrow Power Supply (-1.9%).