The Hang Seng Index dropped 323 points, or 1.2%, to 25,640 on Monday as investors turned more cautious amid renewed geopolitical tensions in the Middle East. Sentiment deteriorated after US President Donald Trump issued a fresh warning to Iran, heightening fears of further regional escalation and possible disruptions to global oil supplies.
Oil prices rose more than 1%, reflecting concerns that prolonged tensions could impede crude shipments through the Strait of Hormuz, a critical global energy corridor. The uptick in oil prices stoked inflation worries and reinforced expectations of higher operating costs for businesses, prompting investors to scale back their equity exposure.
Finance and technology stocks led the market decline. Tencent Holdings eased 0.3%, while AIA Group retreated 1.0%. Other notable losers included Shenzhou International (-0.7%), Hong Kong Exchanges and Clearing (-0.1%), and SMIC (-0.8%). In contrast, Xiaomi Corporation advanced nearly 1%.
