Khaberni - Chinese stocks rapidly emerged as a relatively safe haven amid an ongoing war in the Middle East that has weakened global risk appetite, while investment banks' optimistic view towards a market that has performed better than its regional counterparts in March is increasing.
This month, markets were shaken after the war with Iran effectively closed the Strait of Hormuz, leading to a spike in crude oil prices and negatively affecting stock markets around the world. About a fifth of global oil and gas flows pass through the strait.
J.P. Morgan listed China as the best market for it in the region this month, noting Beijing's reduced dependence on Gulf energy and its considerable capacity to provide financial support.
HSBC maintained its "overweight in investment portfolios" rating for China, stating that the market offers defensive characteristics largely supported by a domestic investor base and a stable currency.
The Shanghai Composite Index in China has lost six percent so far in March, compared to an 18 percent decrease in South Korean stocks and about 13 percent in Japan's Nikkei Index.
BNP analysts said that China's relative better performance compared to the rest of Asia is likely to become more evident as the war continues between the United States and Israel on one side and Iran on the other.
Analysts at Goldman Sachs reported that the Chinese economy seems to be in a better position than many other global economies to handle the oil supply shock, pointing to years of energy source diversification, high strategic oil reserves, and the ability to obtain supplies from outside the Middle East.
