According to analysis, as Middle East conflicts persist, a strategist at Julius Baer noted that if the situation does not significantly worsen, the Hang Seng Index is expected to find solid support between 24,000 and 25,000 points. The strategist emphasized that developments concerning the Strait of Hormuz and Middle Eastern oil facilities are particularly critical. The firm assumes that any blockade of the strait would not exceed one month and that military clashes would not damage regional oil infrastructure. Under this scenario, oil prices may temporarily rise to $80–90 per barrel but are projected to decline again in the second quarter, with volatility in other asset markets likely to be short-lived. Investors should be aware that energy stocks may present only a brief trading opportunity. Should the Strait of Hormuz remain blocked into the second quarter, keeping oil prices above $90 or even $100 for an extended period, upward pressure on U.S. inflation could increase, potentially delaying the Federal Reserve’s interest rate cuts. However, a severe disruption to oil supply could also heighten risk aversion in capital markets, leading to significant fluctuations in both equity and bond markets, alongside a possible rebound in the U.S. dollar. Regarding the mainland market, the strategist indicated that the government work report delivered during the Two Sessions largely met market expectations. Further details of the 15th Five-Year Plan policies are anticipated to be released throughout the year, which may provide positive support for potential beneficiary sectors such as technology. Additionally, as China’s earnings season approaches, corporate guidance is expected to have a substantial impact on market sentiment. Although recent performance of internet platform companies has been disappointing, the analyst believes valuations in the sector have returned to attractive levels. For investment horizons of 6 to 12 months, investors may consider gradually accumulating tech stocks.
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