SHANGHAI, March 4 (Reuters) - China, Hong Kong stocks fell on Wednesday, led by oil and maritime shipping companies, as investors remained risk-off amid the escalating Middle East conflict and turned focus to the annual parliamentary meeting due this week for policy signals.
Worries that a wider conflict could trigger an energy shock, lift inflation and delay rate cuts weighed on sentiment in Asia.
By the lunch break, the blue-chip CSI300 Index .CSI300 fell 1.6%, while the Shanghai Composite Index .SSEC lost 1.4%.
Hong Kong benchmark Hang Seng .HSI shed 2.8% to a six-month low.
Onshore selling was led by oil, maritime transport and port stocks.
The CSI Oil and Gas Industry Index .CSI930653 dropped 3.3% after China Petroleum & Chemical 600028.SS, CNOOC 600938.SS and PetroChina 601857.SS issued abnormal-trading notices following more than 20% gains over the past three sessions; the firms said operations are normal and cautioned on geopolitical uncertainty in crude prices.
Nanjing Port 002040.SZ and Ningbo Marine 600798.SS each fell nearly 10%.
"Geopolitical risks remain unclear and A-shares are in a catch-up decline. In a high-volume downswing, investors should avoid rushing to bottom-fish and watch developments in the conflicts and annual parliamentary meeting for possible policy signals," analysts at Huatai Futures said in a note.
The country's top leadership will publish its annual government work report and budget plans at the opening session of the National People's Congress (NPC), China's rubber-stamp parliament, on Thursday, as well as the outline of its 15th Five-Year Plan for 2026–2030, a sweeping blueprint that sets priorities for industrial policy.
"We expect Beijing to lower the 2026 GDP growth target slightly to 4.5%-5.0% from around 5.0% in 2025," said Ting Lu, chief China economist at Nomura.
He added that Beijing is likely to keep the official fiscal deficit at 4.0% of GDP and lift net financing of off-budget ultra-long central government special bonds to 1.6 trillion yuan ($231.29 billion) and local government special bonds to 4.8 trillion yuan, from 1.3 trillion and 4.4 trillion, respectively, announced in March 2025.
Gains elsewhere helped limit losses. The CSI Defense Index .CSI399973 rebounded about 1% after a sharp selloff in the previous session, and the CSI Rare Earth Index .CSI930598 climbed nearly 1%.
In Hong Kong, financials .HSCIF led declines, falling 3.6%, while tech majors .HSTECH slid 2%, extending losses for a third session.
An official survey showed China's manufacturing activity contracted for a second month in February, underscoring pressure on factory margins as weak domestic demand and investment offset resilient exports.
($1 = 6.9176 Chinese yuan)
(Reporting by Shanghai Newsroom; Editing by Eileen Soreng)
((li.gu@tr.com))
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