Hong Kong Stocks Gain as Middle East Tensions Ease

The Hang Seng Index edged higher by about 181 points, or 0.7%, to 26,085 on Wednesday, as investors tracked gains in global equities while still weighing uncertainty from the Middle East. Sentiment improved after Washington moved to de-escalate tensions with Iran, halting offensive operations, reaffirming the ceasefire, and a temporary suspension of efforts to support vessels leaving the Strait of Hormuz. Oil prices also eased after recent spikes driven by supply disruption concerns, helping to relieve pressure on inflation expectations and improving the outlook for regional equities. The decline in crude further boosted investor confidence across Asian markets, supporting risk assets and extending gains in global equities. In Hong Kong, tech stocks led the rally with Semiconductor Manufacturing International Corporation surging 9.7%. Other notable movers included Xiaomi (1.5%), AIA Group (0.1%), Akeso Inc. (4.4%), and CK Hutchison Holdings (2.4%).

The Hang Seng Index dipped 197 points, or 0.8%, to close at 25,899 on Tuesday, trimming earlier gains as expectations for progress in Washington-Tehran talks continued to fade. Sentiment turned more cautious after a fresh escalation in Middle East tensions, with reports of renewed strikes on maritime targets near the Strait of Hormuz and damage to port facilities across parts of the Gulf, marking the most serious flare-up since a fragile ceasefire was reached several weeks ago. At the same time, oil markets prices held firm triggered by the renewed tensions, with traders reacting to reports of disrupted shipping activity and heightened risks to energy facilities in the Middle East. In Hong Kong, the renewed escalation revived fears that the fragile truce could break down and potentially push the region back into a prolonged period of instability. Among major decliners included Tencent Holdings (-0.2%), Xiaomi Corporation (-1.7%), SMIC (-1.9%), AIA Group (-0.1%), and Trip.com (-1.5%).

The Hang Seng Index jumped about 319 points, or 1.2%, to close at 26,096 on Monday, rebounding from last week’s losses as improving geopolitical developments boosted market sentiment. Investor confidence strengthened after Donald Trump indicated that the US would help ensure safe passage for neutral vessels through the Strait of Hormuz. The development eased fears of prolonged disruption to global oil shipping routes, helping to cool energy prices and reduce inflation concerns. Further support came from signs of progress in negotiations with Iran to end the ongoing conflict, entering its 10th week. Hopes for de-escalation improved overall risk appetite, encouraging investors to return to equities. Locally, Hong Kong property stocks led gains alongside tech shares after Morgan Stanley raised its outlook for home prices. Top performers included Tencent Holdings (1.1%), Xiaomi Corporation (6.8%), SMIC (1.8%), Shanghai Xizhi (15.2%), and AIA Group (2.4%).