China Stocks Roiled in Week by Continuing Gulf War, High Oil Prices

China's stock markets rebounded on Friday but didn't overcome earlier losses in the week as investors globally looked beyond Middle East war rhetoric to what was happening on the ground as the war enters a fifth week with no end in sight.

The benchmark Shanghai Composite Index strengthened 0.63 percent on Friday to end at 3,913 but lost 1.1 percent for the week. The Shenzhen Component Index lost 0.7 percent in the last five days but managed 1.1 percent gain on Friday, thanks mainly to investment in innovative drugs and lithium batteries. Staidson, Hotgen Biotech, Ganfeng Lithium and Hi-Tech Spring all jumped to daily limits.

"Global stock markets are all stumbling amid the war, and the Chinese markets are no exception, though they have been affected to a lesser extent and seize on some bright spots," said Jiang Yifan, an analyst with Shenwan Hongyuan Securities.

The US and Iran exchanged conflicting rhetoric about whether or not talks are underway to end the war, with persistent high oil prices hurting economies around the world and eroding investor confidence. The US extended by 10 days its ultimatum for Iran to reopen the Strait of Hormuz or face "obliterating" attacks on its energy infrastructure.

The finance sector remained a stabilizing factor. Industrial & Commercial Bank of China (ICBC), the largest bank in the world by assets, reported 2025 profit edged up 0.7 percent to 368.6 billion yuan (US$53.3 billion), and operating income gained 1.9 percent to 801.4 billion yuan. Its share rose 1 percent on Friday.

Hong Kong's Hang Seng Index fell 1.29 percent this week. Meituan shares lost 1 percent on Friday after China's largest fast food delivery surface posted a 2005 loss on surging costs related to a war in the dog-eat-dog industry. Drug maker Innovent surged 7.9 percent after turning to profit from loss last year. Offshore oil producer Cnooc shed 0.6 percent after reporting a 12 percent decline in profit for last year, and Air China closed flat after its 2005 loss widened.

Elsewhere in the world, South Korea's Kospi index slumped 5.92 percent this week and Japan's Nikkei ended flat. The Stoxx600 index in Europe ended Friday down 1 percent. On Wall Street, the Dow and Nasdaq moved into correction territory. The Dow Jones Average and the broader S&P 500 each dropped 1.7 percent for the week, and the Nasdaq declined 2 percent. Benchmark Brent crude oil, a main indicator influencing investor sentiment, closed up 4.2 percent on Friday to US$112.57 a barrel.