Hong Kong Stock Exchange Falls, Oil Prices and Geopolitics Under Pressure
The Hang Seng Index weakened on Friday (July 24th), amid mounting pressure from geopolitical tensions in the Middle East. The Hong Kong Stock Exchange fell 1.3%, or around 324 points, to 24,877, after previously posting gains in the previous trading session.
Market sentiment worsened after Brent oil prices rose above US$100 per barrel for the first time in two months. The oil price increase occurred after Houthi attacks on ships in the Red Sea intensified, raising concerns about global energy supply disruptions.
Market uncertainty also increased after US President Donald Trump threatened to escalate attacks on Iran. This prompted investors to avoid riskier assets, including stocks in Hong Kong and Asia.
Pressure on the Hang Seng intensified after a sell-off on Wall Street led by the technology sector. Furthermore, rising US Treasury yields also increased expectations that the Federal Reserve would maintain high interest rates for longer. Several major stocks also weakened, including Tencent (2.2%), AIA (1.5%), Xiaomi (0.7%), Meituan (2.0%), and Kingboard Laminates (2.7%).
However, the Hang Seng's decline was restrained by the Chinese central bank's largest liquidity injection in five months through a medium-term lending facility. This policy raised hopes that additional support for China's economic growth is still available. In terms of market impact, the Hang Seng has the potential to remain volatile as long as oil prices are high, the Middle East conflict remains unabated, and US interest rate expectations continue to dampen investor appetite for risky assets. (asd)
Source: Newsmaker.id
