Hong Kong's stock market continued to be under pressure on Monday morning after opening lower. The Hang Seng Index opened down 1.9%, reaching a new seven-month low, continuing the weak performance of global risk assets from last week. The market focus remains on the escalation in the Middle East and its ripple effects on oil prices, inflation, and interest rate paths. According to a Reuters report, Asian stock markets generally fell on Monday, with U.S. Treasury yields rising to about an eight-month high, reflecting that investors are swiftly reducing their risk exposure.
The decline of the Hang Seng Index is not an isolated phenomenon. The Nikkei Index dropped about 3.9% concurrently, South Korean stocks fell approximately 4.5%, and the MSCI Asia-Pacific excluding Japan Index fell about 1.2%, showing that regional markets are overall being dragged down by high oil prices and risk aversion sentiment. For the Hong Kong market, as a highly open financial market, the weakening of overseas stock markets, a strong U.S. dollar, and rising yields all amplify valuation pressure on technology and cyclical sectors. The last sentence is an analytical judgment based on market structure.
The source of the shock still comes from the Gulf situation. Reuters reported that the U.S. and Iran have been issuing threats around the Strait of Hormuz and energy facilities, with markets worried that the war still cannot cool off quickly after entering its fourth week. Brent crude hover around $111.90 per barrel, and U.S. crude about $98.35, with high energy prices continuing to reinforce concerns of imported inflation.
For Hong Kong stocks, short-term pressure mainly comes from three aspects: rising global yields compressing growth stock valuations, rising oil prices pushing up corporate costs, and external geopolitical risks undermining risk appetite for capital. If the Middle East situation does not ease, the Hang Seng Index may continue to be led by external fluctuations in the short term. This judgment is based on current market conditions.
