Chinese stocks rise on easing Middle East tensions

The Shanghai Composite rose 0.48% to close at a two-month high of 4,180 on Thursday, while the Shenzhen Component climbed 1.18% to above the five-year high level of 15,641.

Markets gained as investor sentiment improved on reports that the US and Iran are close to signing a memorandum to reduce hostilities, which could lead to the reopening of the Strait of Hormuz, a key global oil route. However, Donald Trump warned that military action could resume if Iran fails to comply with the agreement.

Investors are also closely watching next weeks expected summit between Trump and Chinese President Xi Jinping for signals on US-China relations. Meanwhile, reports said Chinas financial regulator instructed major state-owned banks to stop new lending to five refiners sanctioned by the US over alleged links to Irans oil trade, despite earlier guidance from Chinas Commerce Ministry urging companies to ignore US sanctions.

 

Technology stocks remained strong, with gains led by Cambricon Technologies (+2.36%), Zhongji Innolight (+2.51%), and Eoptolink Technology (+7.85%).

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