SHANGHAI (Reuters) – Blue chip Chinese stocks fell on Monday as Sino-U.S. tensions eclipsed optimism from a private sector survey that showed services activity in the world’s second-largest economy had picked up. last month.

The CSI300 index, which includes the largest companies listed in Shanghai and Shenzhen, fell 0.46%, while the Shanghai index rose 0.07%. Hong Kong’s Hang Seng Index rose 0.84%.

Most other Asian stock markets showed gains in optimism the Federal Reserve will halt rate hikes this month after a mixed US jobs report, while oil prices climbed after Saudi Arabia has promised major production cuts.

The Caixin/S&P Global Services Purchasing Managers’ Index (PMI) for China rose from 56.4 in April to 57.1 in May as higher new orders supported the economic recovery in the second quarter.

Chinese property stocks retreated from a rally seen on Friday amid speculation that authorities will implement stimulus policies to bolster the sector.

“We see the outperformance of Chinese equities resume in the second half of 2023 as the easing gathers pace, the macroeconomic recovery broadens and geopolitics stabilizes,” Morgan Stanley said in a note.

The CSI 300 real estate index fell 1.1% and the Hang Seng Mainland real estate index fell 0.9%.

Chinese Defense Minister Li Shangfu said on Sunday that a conflict with the United States would be an “unbearable disaster” but that his country sought dialogue rather than confrontation.

China’s military has scolded the United States and Canada for “deliberately inciting risk” after ships from the two countries embarked on a rare joint voyage through the sensitive Taiwan Strait.

. In TOKYO, the Nikkei index rose 2.20% to 32,217 points.

. In HONG KONG, the HANG SENG index rose by 0.84% ​​to 19,108 points.

. In SHANGHAI, the SSEC index gained 0.07% to 3,232 points.

. The CSI300 index, which includes the largest companies listed in SHANGHAI and SHENZHEN, fell 0.46% to 3,844 points.

. In SEOUL, the KOSPI index rose 0.54% to 2,615 points.

. In TAIWAN, the TAIEX index rose by 0.05% to 16,714 points.

. In SINGAPORE, the STRAITS TIMES index gained 0.72% to 3,189 points.

. In SYDNEY, the S&P/ASX 200 index rose 1.00% to 7,216 points.