Hong Kong Stocks Drop Over 3%

The Hang Seng index dropped more than 3% to around 24,500 on Monday, hitting its lowest level since August 2025, as escalating tensions in the Middle East triggered a broad risk-off move across global markets. Now in its fourth week, the war has kept investors on edge amid increasingly aggressive rhetoric and no clear path to de-escalation. Iran warned it could strike regional energy infrastructure if US President Donald Trump follows through on threats to target its power grid should the Strait of Hormuz remain closed, heightening fears of supply disruptions and a prolonged conflict. In turn, elevated oil prices have fueled inflation concerns and raised expectations for interest rate hikes from major central banks. All Hong Kong sectors retreated, led by property, financials, and tech. Notable laggards included AIA Group (-6.2%), SMIC (4.1%), and Sun Hung Kai Properties (-4.8%). Zijin Mining also dropped 5.4% after announcing it had taken control of Chifeng Gold.

HK50 decreased to 24873.00 Index Points, the lowest since August 2025. Over the past 4 weeks, Hong Kong Stock Market Index (HK50) lost 6.66%, and in the last 12 months, it increased 6.7%.

The Hang Seng fell 223 points, or 0.9%, to end at 25,277 on Friday, extending losses for the second session as most sectors dropped. Sentiment remained cautious after global central bankers warned the Middle East war could reignite inflation, while the IMF noted the impact depends on its duration and intensity. Tech and consumers posted steep declines, with property also weaker. Weekly, the index logged a third straight drop, down 0.7%, amid worries that China may delay new support measures until growth shows deeper strain. The PBoC held key lending rates at record lows for a tenth month in March, even as surging oil prices from the Iran conflict put Beijing on track to exit deflation earlier than expected. Still, losses were offset by data showing China's youth jobless rate hit an 8-month low in February. Xiaomi slipped 7.8%, followed by SMIC (-4.9%), China Unicom (-4.5%), and Sunny Optical (-3.5%). Traders now await Hong Kong’s February inflation and Q4 current account later today.