The Hang Seng Index fell 0.1 per cent to 23,498.82 at the noon break. The Hang Seng Tech Index was little changed. On the mainland, the CSI 300 Index slid 0.2 per cent, while the Shanghai Composite Index added 0.2 per cent.
The biggest companies on the Hang Seng Index dropped, with Alibaba Group Holding falling 1.6 per cent to HK$109.90 and Tencent Holdings slipping 1.3 per cent to HK$499.20. Among the biggest decliners, machine tool maker Techtronic Industries lost 2.4 per cent to HK$82.65 and Xinyi Solar slumped 2.2 per cent to HK$2.27.
Brent oil futures surged by as much as 5.7 per cent to HK$81.40 a barrel after US President Donald Trump said in a televised address that air strikes had obliterated Iran’s nuclear infrastructure at three sites and threatened more military action if Tehran did not make peace. Iran warned of “everlasting consequences” of the attack and said it was weighing the closure of the Hormuz Strait, a chokepoint for a third of the world’s oil shipments.
“Markets are already building in a fatter geopolitical risk premium,” said Stephen Innes, a managing partner at SPI Asset Management in Bangkok. “This market will reprice everything once again. Traders are likely to remain in oil market tail risk hedges until a peace pipe starts making the rounds.”
A shutdown of the Hormuz Strait would probably raise oil prices to as high as US$120 a barrel, he added.
