The Hang Seng Tech Index fell 1% on Monday as escalating U.S.-Iran tensions and surging crude oil prices triggered a broad risk-off move across Asian equity markets, with the technology benchmark diverging from the broader Hang Seng Index which edged higher.
The Hang Seng Tech Index slid 1% on Monday as U.S.-Iran tensions and surging crude oil prices triggered a risk-off move across Asian equity markets.
"Geopolitical risk is dominating trading today, with investors rotating out of tech into defensive positions," said Kevin Ip, HK equities analyst at Edgen.
The decline in Hong Kong's technology benchmark contrasted with the broader Hang Seng Index, which edged 0.91% higher, as energy and commodity-linked stocks gained on the crude rally. Brent futures rose 3.7% to $78.86 per barrel, while West Texas Intermediate advanced more than 3% to $74.05, after Iran declared the Strait of Hormuz closed and the U.S. launched airstrikes over the weekend. President Donald Trump disputed the closure claim on Sunday, saying the key waterway was open to commercial traffic. Across the region, the selloff was broad-based. South Korea's Kospi plunged more than 7% to below 7,000, its lowest since May 4, while Japan's Nikkei 225 lost 1.57% and the Topix declined 0.52%. Australia's S&P/ASX 200 fell 0.35%. Mainland China's CSI 300 dropped 0.64%. U.S. stock futures also pointed lower, with S&P 500 futures losing 0.58% and Nasdaq-100 futures down 1.37%, as traders braced for a busy week of corporate earnings.
The selloff in tech names shows the vulnerability of Hong Kong-listed technology stocks to external shocks, with the index now down from its recent highs. Investors are turning their attention to U.S. CPI data due Tuesday and the start of second-quarter earnings season, with 28 S&P 500 companies — including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo — set to report this week. On average, analysts estimate that second-quarter S&P 500 profits grew by more than 23% year over year, per FactSet. Raymond James CIO Larry Adam said AI-related capital spending plans are expected to be reaffirmed and to rise through 2028, with mentions of AI across all 11 sectors up 98% year over year. A sustained closure of the Strait of Hormuz could cause major global energy shortages, Fed Watch Advisors founder Ben Emons said, though he noted the focus next week will also be on CPI, the Warsh nomination, and bank earnings.
This article is for informational purposes only and does not constitute investment advice.
