China's Stock Markets Stumble as Investors Take Cover From War Impact

China's stock markets stumbled this week as the impact of the Iran war caused some investors to keep fewer assets in equities.

The benchmark Shanghai Composite Index lost 1 percent on Friday, ending the week with a drop of 0.86 percent. The Shenzhen Component Index retreated 0.99 percent on Friday and slumped 3 percent for the last five trading days, while the ChiNext dived 3.8 percent. However, Hong Kong's market, closed on Friday for a holiday, added 0.66 percent in four days of trading.

"People's trust and patience are severely challenged by the huge uncertainties brought about by the war," said Xiao Yong, an analyst with Changjiang Securities. "The market is now having a revaluation of the impact of a prolonged blockage in the Hormuz Strait."

US President Donald Trump this week did little to assuage investor fears, promising to hit Iran "hard" in the next two to three weeks. French President Emmanuel Macron accused Trump of flip-flopping statements on the war, suggesting he talk less. With some 2,000 vessels still blocked in the Persian Gulf, the spot oil price surged to US$141 a barrel, its highest level since the 2008 financial crisis. On Friday, Trump said the US could open the Hormuz Strait, a vital oil and gas waterway, "take the oil and make a fortune" – a claim largely discounted by military analysts. The downing of two US planes by Iran on Friday is likely to sour investor sentiment when markets reopen next week.

Chinese markets will be closed on Monday for the Qingming holiday, prompting some investors to sell down share holdings to protect themselves from any global shocks before trading resumes, Xiao said.

Friday's share price declines affected more than 4,700 Chinese mainland stocks, with the power sector among the hardest hit. Mindong Electric, Leshan Electric and Top Ray Solar all dropped by the daily limit.

Corporate earnings reports guided share prices this week.

Shares in Shenzhen-based UBTech Robotics, a leading player in embodied humanoid robots, jumped 17 percent on Wednesday and 2 percent on Thursday after the company said it narrowed its 2025 loss to 715 million yuan (US$104 million) from 1.1 billion yuan a year earlier on a 53 percent rise in revenue. UBTech said it is seeking to recruit a new chief scientist at a salary starting at 15 million yuan a year.

Shares in Knowledge Atlas Technology, one of China's so-called "AI Tiger" companies, surged 32 percent on Wednesday after the company, rebranded from Zhipu in China, said its revenue surged 132 percent to 724.3 billion yuan in 2025, although its loss nearly doubled on higher investment in technology. However, the shares retreated 15 percent on Thursday.

Shares in China Vanke, a former leader in the Chinese mainland property market now flying close to default, dropped 3.4 percent to 2.88 yuan on Friday after the company reported this week that its 2025 loss widened to 88.6 billion yuan from 49.5 billion yuan a year earlier, nearly 6 billion yuan more than forecast. The company has an estimated US$11 billion in onshore and foreign liabilities.

Shares in Shanghai-based China Eastern Airlines fell 3.4 percent on Thursday in Hong Kong. The airline announced this week that its 2025 loss narrowed to 1.6 billion yuan (US$236 million) from 4.2 billion yuan a year as revenue rose higher numbers of international, but the airline is now struggling from higher jet fuel prices caused by the war in Iran. The carrier announced on Friday that it will hike fuel surcharges sixfold for flights of 800 kilometers or less.

Shenzhen-listed Hongchang Electrical Technology, an investor in Chinese motorcycle maker ZXMoto, surged nearly 3 percent on Friday after a rider on a ZXMoto bike earlier in the week won double victories at the Superbike World Championship in Portugal. It was China's first-ever win on the circuit. The success also boosted other motorcycle-related shares, including QJMotor and Choho Manufacturing.

Across Asia this week, Japan's Nikkei gained 1.3 percent on Friday but lost 0.47 percent for the week. South Korea's Kospi jumped 2.7 percent on Friday but wrapped up the week with a decline of 1.1 percent. Both nations are heavily dependent on oil supplies through the Strait of Hormuz. Markets in Europe and US were closed on Friday for the Good Friday holiday.