The Hang Seng Index closed lower on Tuesday, declining 0.7% or 177.5 points to finish at 25,116.53, with total market turnover reaching HK$243.66 billion. The Hang Seng China Enterprises Index fell 0.56% to 8,456.92, while the Hang Seng Tech Index dropped 1.63% to 4,679.1. For the week, the Hang Seng Index gained 0.66%, the HSCEI edged up 0.04%, and the Tech Index declined 2.07%.
Market sentiment was dampened after former U.S. President Donald Trump threatened to strike Iran, dashing earlier hopes for a swift end to hostilities. Analysts noted that prolonged U.S.-Iran tensions could pose further downside risks to U.S. stocks, with Hong Kong equities likely to follow due to strong correlation. Some cautioned against premature buying, suggesting investors await new catalysts. Others highlighted that sustained high oil prices may fuel reflation trades, though external uncertainties could continue to weigh on the Hong Kong market.
Among blue-chip stocks, Geely Auto (00175) led gains, rising 8.37% to HK$23.82, contributing 19.06 points to the index. Citi Research noted that Geely's March sales reached 233,000 vehicles, with first-quarter sales totaling 704,000 units, exceeding expectations. Strong export growth of 34% quarter-on-quarter and a better-than-expected sales mix also supported the upbeat outlook. The bank raised its target price on Geely from HK$26 to HK$27, maintaining a "Buy" rating.
Other notable blue-chip movers included Hansoh Pharma (03692), up 5.18% to HK$39.36, adding 4.72 index points, and Sunny Optical (02382), which gained 5.18% to HK$59.9, contributing 3.27 points. On the downside, SMIC (00981) fell 3.5% to HK$51, dragging the index down by 12.31 points, while Alibaba-W (09988) dropped 3.42% to HK$118.5, weighing heavily with a 64.22-point deduction.
Sector performance was mixed. Most large-cap tech stocks declined, with Alibaba down over 3% and Tencent falling 1.49%. Selected oil and gas names advanced amid rising geopolitical tensions; Shandong Molong surged over 16%. Pork producers also rose after authorities announced plans for a new round of state frozen pork purchases. Automakers saw diverging trends, with Geely Auto climbing over 8% after reporting record March exports. Coal, pharmaceutical, and lithium-related stocks also gained. In contrast, airline stocks fell under pressure from higher oil prices, with China Eastern Airlines down nearly 5%. Chipmakers, gold producers, and AI application shares broadly declined.
1. Selected oil and gas stocks strengthened. Shandong Molong (00568) jumped 16.37% to HK$9.24, BQ Energy Services (02178) rose 9.26% to HK$0.295, and Sinopec Oilfield Service (01033) added 3.37% to HK$0.92. International crude prices extended gains, with WTI crude rising over 5% to $105.65 per barrel and Brent crude climbing as much as 7% to $108. Trump's hardened stance reduced market expectations for a near-term resolution to the conflict.
2. Automobile stocks showed mixed performance. Chery Auto (09973) surged 15.26% to HK$32.02, Geely Auto (00175) advanced 8.37% to HK$23.82, and Leapmotor (09863) rose 3.41% to HK$53. XPeng Group-W (09868) dipped 0.73% to HK$67.75. Several automakers reported March delivery figures, with Leapmotor exceeding 50,000 units to lead among emerging EV makers. Geely Auto reported 233,000 vehicles sold in March, with exports surging 120% year-on-year and 34% month-on-month to 81,639 units. Analysts noted that rising oil prices may enhance the economic appeal of electric vehicles, particularly in Europe and Southeast Asia.
3. Pork producers rose against the broader downtrend. Dekon Food (02419) climbed 5.99% to HK$66.35, while Muyuan Foods (02714) gained 4.31% to HK$40.2. The state planning agency, along with commerce and finance ministries, announced a new round of central frozen pork purchases to stabilize the market. Further measures are expected to guide production capacity and support stable operations. Some analysts projected supply pressure may ease in the second half of 2026 as capacity adjustments take effect.
4. Airline stocks came under collective pressure. China Eastern Airlines (00670) fell 4.86% to HK$3.72, China Southern Airlines (01055) dropped 4.26% to HK$4.05, Air China (00753) declined 3.81% to HK$4.8, and Cathay Pacific (00293) slipped 2.81% to HK$11.41. Soaring jet fuel costs, which account for 30–40% of airline operating expenses, are expected to weigh heavily on earnings. A sharp increase in domestic fuel surcharges, effective April 5, is set to further pressure travel demand.
Notable movers included Leoch International (00842), which surged 76.79% to HK$0.99 after canceling plans to spin off its energy unit for a U.S. listing. Extreme Vision (06636) jumped 20.12% to HK$99.7 amid strong retail subscription interest for its AI vision solutions. Fourier Semiconductor (03625) hit a new high, rising 12.61% to HK$92 following a heavily oversubscribed IPO. Ming Ming Is Busy (01768) extended gains, rising 5.35% to HK$382, supported by robust same-store sales growth and product innovation.
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