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Cao Li

Hong Kong stocks dropped on Monday as escalating tensions in the Middle East sent oil prices to recent highs.
Over the weekend, Yemen’s Iran-backed Houthi rebels launched attacks directly on Israel, which intensified strikes on Tehran. The US has also deployed additional military forces to the Middle East.
The escalation pushed up oil prices, with Brent crude jumping as much as 3.7 per cent to US$116.80 a barrel, its highest in more than a week, while West Texas Intermediate rose to US$101 a barrel.
The Hang Seng Index fell 0.8 per cent to close at 24,750.79. The Hang Seng Tech Index dropped 1.8 per cent. On the mainland, the CSI 300 Index retreated 0.2 per cent and the Shanghai Composite Index gained 0.2 per cent.
Markets across Asia declined. Japan’s Nikkei 225 fell 2.8 per cent and South Korea’s Kospi slumped 3 per cent. In Australia, the S&P/ASX 200 lost 0.7 per cent.
Asia faces the greatest exposure among energy importers. In 2024, nearly 80 to 85 per cent of the oil and liquefied natural gas passing through the Strait of Hormuz flowed to Asian markets, primarily China, India, Japan and South Korea, according to Lazard Geopolitical Advisory.

“The market is anxious that sustained high oil prices will deliver a significant shock to both the future economy and investment markets,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International.
Continued tensions also saw Iran strike Middle Eastern aluminium plants over the weekend, a move expected to threaten global supply chains and potentially drive aluminium prices to record highs.
The news drove gains for several aluminium producers, according to Lorraine Tan, director of equity research in Asia at Morningstar.
Shares of Hong Kong-listed Aluminum Corporation of China, China’s largest alumina and primary aluminium producer, jumped 7.3 per cent to close at HK$11.60. China Hongqiao Group, one of the world’s largest aluminium smelters, rallied 3.7 per cent to close at HK$35.78.
Among others, CK Infrastructure Holdings rose 2.1 per cent to HK$62.75, while China Construction Bank rallied 1.9 per cent to HK$8.24.
Garment maker Shenzhou International led the declines, falling 8.1 per cent to close at HK$48.04, while home appliance maker Haier Smart Home dropped 5.4 per cent to HK$20.70. BYD Electronic International fell 4.8 per cent to HK$29.12.
The Hang Seng Index has fallen 12 per cent from a late January high of 28,056.10. Its weakness had been driven largely by geopolitical friction in the Middle East and disappointing tech earnings, Ng said. But China’s stabilising economy could provide support for Hong Kong stocks, Ng added.
China’s exports surged 22 per cent in the first two months of the year compared with a year earlier, while the years-long property downturn showed signs of a tentative floor as new home prices in first-tier cities stabilised in February, halting a nine-month decline.
“Mainland A shares have shown less volatility than Hong Kong,” Ng said. “This could offer some stability for the Hong Kong market.”
“Amid prevailing risk-off sentiment, Chinese equities have shown relative resilience compared to regional peers since the eruption of war in late February,” said Edith Qian, an analyst at CGS International in Hong Kong.
“This resilience is underpinned by China’s energy security, with exposure to the Middle East accounting for only about 6 per cent of total energy consumption. Besides, Beijing has implemented pre‑emptive measures by restricting exports of refined oil and fertilisers.”
There was a 70 per cent probability oil prices would peak in the next three to four weeks as the Middle East conflict eased, according to Raymond Cheng, chief investment officer for North Asia at Standard Chartered. If that happened, the Hang Seng Index could rise up to 29,000, he added.
However, if it does not happen, or if the US Federal Reserve will not resume rate cuts in the second half of the year, the index could retreat to as low as 21,500. “Until there is more concrete evidence of a resolution, we are likely to see markets come under pressure,” said Tan.


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Most Asian markets retreat as surging oil prices fuel concerns over the economic fallout, while aluminium producers rally on supply fears


Most Asian markets retreat as surging oil prices fuel concerns over the economic fallout, while aluminium producers rally on supply fears.


Hong Kong stocks fall with Asia as Iran conflict drives oil prices higher

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Most Asian markets retreat as surging oil prices fuel concerns over the economic fallout, while aluminium producers rally on supply fears

Most Asian markets retreat as surging oil prices fuel concerns over the economic fallout, while aluminium producers rally on supply fears