2026.03.0302:27:52UTC+00China Stocks Drop on Inflation Concerns

The Shanghai Composite Index declined 0.8% to below 4,150, while the Shenzhen Component Index slid 2.2% to 14,145 on Tuesday, erasing gains from the previous session. The pullback came amid renewed inflation concerns, as the escalating conflict in the Middle East drove energy prices higher. Given China’s heavy dependence on oil imports from the region, rising energy costs risk weighing on economic growth and fuelling domestic inflation.

Market participants also monitored the prospect of intensified US military action against Iran, which could further disrupt energy markets. On the domestic front, attention shifted to the annual “Two Sessions,” to be held from March 4 to around March 11. During these key political meetings, authorities are expected to set economic growth and policy targets, outline broader policy priorities, and release details of the 15th Five-Year Plan, which will define development objectives for 2026–2030.

Selling pressure was pronounced among major listed firms, with notable declines in Suzhou TFC Optical (-1.2%), Zijin Mining (-3.7%), TBEA Co. (-4.8%), Victory Giant (-2.3%), and China Northern Rare Earth (-7.7%).