Investment Insights

CIO Viewpoints

HK stocks volatility surged on Mideast unrest, how to position?

Daily Insights

Focus of the Day

  • Rising energy prices provided some support for Australian dollar

Other Commentaries

  • Mainland released multiple policies to maintain financial stability; US February non-farm payrolls unexpectedly declined; Qatar indicated oil prices might rise to $150

Market Analysis

FX Markets Analysis

Latest Technical Highlights

XAU - Uptrend↗

Support / Resistance

vs HKD(Oz) 35,972 / 43,792

vs USD(Oz) 4,600 / 5,600

President Trump said military action would not end unless Iran “surrenders unconditionally”. Markets interpret this as a more hawkish US stance, reducing the likelihood of a near-term diplomatic de-escalation. As a result, safe-haven demand is providing support to gold prices

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

*Pertaining to historical technical trend analysis only and do not reflect any forecasts or any forward looking views

Provided by Hang Seng Investment Services Limited

Stock Markets View

  • Geopolitical tensions in the Middle East have pushed oil prices higher, weighing on US industrials and consumer sectors. The Dow saw a larger decline, while the Nasdaq fell less supported by heavyweight AI-related stocks. Market is monitoring the February CPI data
  • European equities have pulled back from record highs, mainly dragged down by a sharp rise in energy prices and inflation data coming in above expectations. Developments in the Middle East and European Central Bank policy will be key drivers for European markets
  • The sharp rise in energy prices has made markets such as South Korea and Japan highly volatile. Within the region, China A-shares, Hong Kong equities, India, and Singapore are relatively less affected by geopolitical risks
  • Escalating conflict in the Middle East could reinforce global inflation expectations. Higher energy costs and a stronger US dollar may reduce risk appetite, keeping emerging market equities and FX volatile
  • In the near term, Hong Kong equities remain influenced by Middle East geopolitical risks, while China A-shares are relatively less affected by external factors. In addition, multiple measures introduced by mainland China to support capital markets should help stabilize sentiment
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

Bond Markets View

  • Rising tensions in the Middle East have driven a sharp increase in oil prices, reigniting inflation concerns and pushing U.S. Treasury yields higher. However, an uncertain U.S. economic outlook has provided support for Treasuries at lower levels
  • Long-term U.S. yields rose in tandem with oil prices, leading U.S. investment-grade corporate bonds to fall by nearly 1% week-on-week. Overall credit spreads, however, were broadly unchanged
  • Year-to-date, RMB bond issuance by offshore institutions has reached a record high, highlighting the renminbi’s growing appeal in the market
  • The U.S.–Iran conflict has lifted oil prices and slightly widened sector spreads. That said, a small number of AI-related issuers still came to market with new bonds priced at the lower end of guidance, indicating continued allocation demand
  • China’s “Two Sessions” reiterated efforts to stabilize the property market, including city-specific measures to manage incremental supply. However, new home prices across 100 cities recorded the largest month-on-month decline in nearly three years in February, suggesting that fundamental recovery will take time
  • Escalating Middle East tensions have disrupted energy supply expectations, leading to a modest widening in emerging market spreads. Nevertheless, many countries’ fundamentals and policy frameworks are more resilient than in the past and are expected to absorb the shock relatively well
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

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