Hong Kong Shares End Flat Amid Geopolitical Jitters

The Hang Seng Index traded almost flat, closing around 25,600 on Tuesday after giving up earlier gains, as renewed concerns over Middle East supply risks were triggered by US military strikes in southern Iran. Sentiment remained cautious amid ongoing US-Iran peace negotiations, which investors continued to monitor for signs of de-escalation. However, Chinese equities listed in Hong Kong advanced after the holiday, with investors largely shrugging off Beijing’s latest crackdown on illicit cross-border stock trading and instead rotating into technology shares. Finance and technology services declined while electronic technology shares surged around 12.8%. Among notable laggards were Tencent Holdings (-0.5%), Meituan Class (-3.1%), Xiaomi Corporation (-0.8%). In contrast, Semiconductor Manufacturing International Corporation rose 5.95%, while Lenovo Group and Dongyue Group jumped 15.3% and 15.6%, respectively.

The Hang Seng Index rose 60 points, or 0.2%, to around 25,660 on Tuesday, as optimism surrounding a potential US-Iran agreement earlier supported Asian equities and weighed on oil prices. Washington and Tehran were reportedly edging closer to a possible deal aimed at reducing tensions and restoring access through the Strait of Hormuz. Sentiment toward Xiaomi Corporation deteriorated after short bets on the company climbed to a record high amid concerns over rising memory costs and intensifying competition in China’s electric vehicle market. Financial and electronic technology stocks led the index higher, with notable gains in Semiconductor Manufacturing International Corporation and Lenovo Group, which surged 9.1% and 10.7%, respectively. Other movers were Xiaomi Corporation (0.4%), Kingboard Laminates (8.5%), and XPeng Inc. (4.7%). In contrast, the technology services sector fell about 0.7%, with Tencent Holdings down nearly 1%.

The Hang Seng Index climbed 220 points, or 0.9%, to close at 25,606 on Friday, recovering from the previous session’s losses and tracking overnight gains on Wall Street and boosted sentiment amid hopes for a potential US-Iran agreement to end the conflict. Reports indicated that Iran viewed the latest US proposal as helping to narrow differences between the two sides, reinforcing hopes for progress in negotiations. On the data front, investor sentiment was also supported after Hong Kong’s inflation rate held steady at 1.7% in April, unchanged from the previous month, signaling stable underlying price pressures. In Hong Kong, technology services surged 12.6%, led by strong gains in SMIC and Lenovo, which rose 7.6% and 19.8%, respectively. Other notable movers included Tencent Holdings (0.6%), Knowledge Atlas Technology (26.9%), and Sunny Optical Technology (1.5%). Hong Kong markets remained closed on Monday in observation of Vesak Day.