Market Sell-off Deepens in China and Asia as Military Strikes In the Middle East Intensifies

Li Chen
04 Mar, 2026
Hong Kong

Stocks in China, Hong Kong, and Asia continued to drift amid a growing realization that the conflict in the Middle East is likely to drag on. 

The sharp rise in crude oil prices for the third day in a row stoked fears of a rebound in inflation and a decline in economic growth. 

Brent crude oil prices advanced to $82.15 a barrel as investors began to factor in the possibility of a prolonged war in the Middle East involving as many as twelve nations.

China imports about 90% of Iran's crude oil exports, and 22% of the world's natural gas exports pass through the Strait of Hormuz, which is closed down by Iran.

The worry of energy supply disruptions weighed on stock prices around the world and drove higher oil prices for the third day in a row. 

Market indexes in Japan fell more than 3% for the second consecutive session, and they plunged 11%, extending a two-day decline to more than 18%. 

China's business activities rose in February amid an improving business climate ahead of the start of the Lunar Year.

The RatingDog China General Manufacturing PMI advanced to 52.1 in February from 50.3 in January, marking the expansion for the third month in a row and increasing to the highest level since December 2020.

The service sector activities expanded in February, reversing the deceleration over the last four months. 

The RatingDog China General Services PMI soared to 56.7 in February from 52.3 in the previous month, reaching the highest level since May 2023.

 

China Indexes and Stocks 

The Hang Seng Index decreased 2.8% to 25,037.75, and the mainland-focused CSI 300 Index declined 1.6% to 4,581.06. 

COSCO declined 7% to HK $15.15, China Merchants Port Holdings decreased 2.5% to HK $16.53, and Orient Overseas International fell 3.2% to HK $152.70.