Hang Seng Plunges More Than 3%, Global Risk-Off Strengthens Amid Energy Risks
The Hang Seng Index plunged more than 3% to around 24,500 on Monday, hitting its lowest level since August 2025. The decline occurred as the escalation of the Middle East conflict triggered a wave of risk-off in global markets, with investors increasingly defensive as the conflict entered its fourth week without a clear path to de-escalation.
Increasingly aggressive rhetoric has heightened concerns about supply disruptions. Iran has warned it could attack regional energy infrastructure if US President Donald Trump actually targets Iran's power grid if the Strait of Hormuz remains closed. This scenario has kept energy risk premiums high and heightened uncertainty about the duration of the conflict.
Sustained high oil prices have again raised inflation risks, fueling expectations that major central banks could maintain tighter policies for longer—even opening room for tightening—which typically pressures riskier assets like stocks. The combination of energy inflation and geopolitical uncertainty has led market participants to reduce exposure to cyclical sectors.
The decline in Hong Kong was widespread, with all sectors declining, led by property, financials, and technology. This pattern is consistent with a risk-off shift, as investors reduce positions in stocks sensitive to interest rates and growth sentiment.
At the stock level, AIA Group fell 6.2%, Sun Hung Kai Properties fell 4.8%, and SMIC also suffered (around -4.1%). Zijin Mining fell 5.4% after announcing its acquisition of Chifeng Gold, adding pressure to commodity-related stocks amid high market volatility.
Going forward, the direction of the Hang Seng will be heavily influenced by the path of energy prices, developments in shipping security in the region, and whether conflict rhetoric shifts toward de-escalation or raises the risk of broader supply disruptions. The market will also be monitoring whether global interest rate expectations turn more hawkish if energy inflation persists.
Source: Newsmaker.id
