Investor Apprehension Rattles Chinese and Hong Kong Markets

Shares in China and Hong Kong faced significant declines following the U.S. Defense Department's decision to add firms like Tencent and CATL to a list of entities linked with Beijing's military. This development raised concerns among investors about potential market volatility and geopolitical risks.

Shares in both China and Hong Kong saw a broad decline on Tuesday due to apprehensions over foreign investors further decreasing their stakes in local equities. This follows the U.S. decision to place tech giant Tencent and others on a list of companies purportedly connected with China's military.

The blue-chip CSI300 Index and the Shanghai Composite Index faced declines of 0.08% and 0.32% respectively by the midday mark, set for their fifth consecutive day of losses. Meanwhile, Hong Kong's Hang Seng benchmark saw a significant 1.9% drop.

The inclusion of firms like Tencent and CATL in the U.S. Defense Department's list has raised concerns about sustained investor caution, potentially exacerbated by geopolitical tensions and possible new tariffs promised by President-elect Trump. The healthcare sub-index notably led A-share declines with a 2.02% drop.

(With inputs from agencies.)