China Stocks Fall on Geopolitical Tensions

The Shanghai Composite fell 0.46% to close at 3,972, while the Shenzhen Component dropped 0.11% to 13,202 on Monday, extending losses from the prior session as rising geopolitical tensions between China and Japan weighed on sentiment.

Last week, Japanese Prime Minister Sanae Takaichi warned that a Chinese attack on Taiwan could threaten Japan’s survival and potentially trigger a military response.

Meanwhile, Beijing cautioned Tokyo against intervening over Taiwan and warned Chinese citizens about traveling to Japan.

Notable declines came from heavyweight firms including Contemporary Amperex down 3.3%, Sungrow Power down 0.7%, Cambricon Technologies down 1.7%, Shannon Semiconductor down 2.1%, and Zhejiang Century down 9.2%.

There are no major economic releases scheduled for China this week, though the People’s Bank of China is expected to keep loan prime rates steady.