China stocks slip as oil price surge outweighs market support efforts
FXI•Mixed performance across mainland indices
Semiconductor and aviation stocks gained by midday while most sectors dropped.
The smaller Shenzhen index was down 1.96%, the start-up board ChiNext Composite index was weaker by 1.78% and Shanghai's tech-focused STAR50 index was up 0.27%.
Oil and geopolitical worries weigh on sentiment
Brent crude jumped to above $100 a barrel after U.S. President Donald Trump promised "major military punishment" for Iran and its Houthi allies on Thursday.
Geopolitical uncertainties and higher oil prices have weighed on regional market performance.
Policy expectations and IPO concerns add pressure
The upcoming listing of Chinese memory giant CXMT has also weighed on market sentiment, as investors fear such mega IPOs will sap market liquidity.
"Investors remained cautious ahead of the July Politburo meeting and the anticipated IPO of CXMT, despite continued market stabilisation efforts from the 'national team' in recent weeks," Morgan Stanley analysts said in a note.
China's securities regulator pledged on Thursday to prevent risks in key areas and strengthen policy reserves to respond to global market fluctuations and cross-border risk transmission, according to a meeting readout.
Analysts said the market is closely looking for any change in policy direction or stimulus measures at the Politburo meeting next week.
The weak second-quarter data prints call for support measures, DBS analysts said in a note.
