Investors remain focused on the Israel-Iran conflict, US trade policy, and stimulus measures from Beijing. These factors will likely determine whether the Hang Seng Index breaks below 23,000 or retargets 24,000.
Hang Seng Index Extends Losses on Geopolitical Tensions
US equity markets closed mixed on June 18, with the Nasdaq Composite Index up 0.13% and the Dow and S&P 500 dropping 0.10% and 0.03%, respectively. However, Asian markets fared worse. The Hang Seng Index fell 2.02% to 23,232 during the morning session on June 19. Mainland China’s markets also declined, with the CSI 300 and Shanghai Composite Index down 0.78% and 0.86%, respectively.
EV, Real Estate, and Tech Stocks Drive Market Declines
Fears of a US strike on Iran weighed heavily on Hong Kong and Mainland China markets. The Hang Seng Mainland Properties Index tumbled 2.42%. Tech heavyweights Alibaba (09988) and Baidu (09888) slid 1.96% and 1.56%, respectively, sending the Hang Seng Tech Index down 2.38%.
EV stocks mirrored the broader downtrend, with BYD (01211) and Li Auto (02015) shedding 2.51% and 1.34%, respectively.
Middle East Escalation: Trump’s Strike Plan Fuels Uncertainty
Overnight reports of President Trump approving attack plans for Iran underscored the sharp escalation in the Middle East conflict. According to media outlets, US officials are preparing for a possible strike on Iran, potentially as early as this week, though Trump has yet to give the green light. His comment – “I may do it. I may not do it” – left the markets on edge.
News of the US deploying supercarrier USS Gerald R. Ford to the Mediterranean fueled fears of an imminent military strike.