Featured News Headlines
Hang Seng Index- Iran Conflict Fuels Oil Rally and Market Uncertainty
Hang Seng Index– Markets opened the week under heavy pressure following a dramatic escalation in the Iran-Israel conflict. Over the weekend, the United States reportedly conducted airstrikes on three nuclear sites in Iran, intensifying fears of a broader Middle East war. As investors braced for potential retaliation, Iran’s parliament voted to approve a plan to close the Strait of Hormuz — a critical global oil transit point.
WTI crude oil surged 2.01% to $75.035 in early Asian trading on Monday, June 23, as concerns mounted over the security of energy flows through the Persian Gulf. Meanwhile, Asian equity markets reacted sharply to the news, with the Hang Seng Index falling early in the session.
Hang Seng Index Under Pressure
The Hang Seng Index dropped 0.61% to 23,387 in early trading, reversing Friday’s gains. The weakness mirrored a cautious session on Wall Street, where the Nasdaq and S&P 500 closed lower while the Dow inched up 0.08%. Chinese mainland indices also slipped, with the CSI 300 and Shanghai Composite Index falling 0.49% and 0.31%, respectively.
Tech and EV Stocks Drag Down the Index
Risk aversion was most pronounced in tech and electric vehicle (EV) stocks. As concerns over Iran’s retaliation mounted, consumer sentiment weakened, hitting growth-oriented sectors.
- Alibaba (09988) slid 1.52%
- Baidu (09888) dropped 1.03%
- Hang Seng Tech Index declined 0.78%
- BYD (01211) and Li Auto (02015) lost 1.11% and 0.29%, respectively
These declines underscore how geopolitical tensions are spilling into equity markets, particularly in sectors sensitive to sentiment shifts.
Strait of Hormuz at the Center of Global Risk
Iran’s threat to close the Strait of Hormuz added significant downside risk to global markets. On June 22, Iran launched missiles toward Israel in response to the US strikes, while its parliament moved to approve a potential closure of the Strait — a chokepoint for 20% of global oil shipments.
Iran’s Supreme National Security Council must now decide whether to implement the closure — a move not taken since 1972.
Economists noted that such a step would drive oil prices sharply higher, stoke inflation, and complicate monetary policy globally. However, some analysts argued that Iran may avoid closing the Strait fully, as roughly half of the oil passing through it is bound for China, one of Iran’s key trade allies.
Technical Outlook: Can Hang Seng Hold 23,000?
The Hang Seng Index hovered near key technical levels during Monday’s session. Despite the drop, it remained above the 50-day Exponential Moving Average (EMA) at 23,238 — a sign that a bullish structure is still intact unless broken decisively.
Key Technical Levels
- Resistance: 23,500 (interim), 24,000, 24,439 (June 11 high)
- Support: 50-day EMA at 23,238, then 23,000, with deeper risk toward 22,500 if geopolitical risks escalate
A break above 24,000 would likely require a ceasefire or progress in US-Iran nuclear talks. Conversely, a confirmed Strait of Hormuz shutdown could pull the index below 23,000, possibly opening the door to a deeper correction toward 22,500.
“Oil and FX markets are pricing in a short-lived conflict, which may cushion the downside — but sentiment remains fragile,” noted one strategist.
What Could Happen Next?
If tensions ease, investor focus could return to China’s stimulus policies and US-China trade developments. These themes, along with Middle East stability, will shape the Hang Seng’s next move.
Two Scenarios to Watch
- Ceasefire and Diplomacy:
- A US-Iran diplomatic breakthrough could lift sentiment
- Technical breakout toward 24,000 possible with volume confirmation
- Escalation and Strait Closure:
- Heightened risk-off mood
- Support at 23,000 vulnerable, with next key level at 22,500
Geopolitics Dictate the Market Mood
As of June 23, the Hang Seng Index trades within a narrow range, reflecting investor caution. The outcome of the Iran-Israel conflict — particularly regarding the Strait of Hormuz — will be critical for market direction in the days ahead. While technicals suggest a modest bullish bias, headlines remain the primary catalyst.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
