Hong Kong stocks log worst week in three months as Middle East conflict reports batter sentiment, investors seek havens

Gold and US Treasuries rally as investors sought safe haven assets. Stocks of gold and energy companies advance as bullion and oil prices vault.

Japanese investment bank Nomura downgrades MSCI Hong Kong to ‘underweight’ from ‘neutral’ in its model portfolio

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Published: 10:57am, 19 Apr 2024Updated: 4:49pm, 19 Apr 2024

Hong Kong stocks tumbled to register the worst week in three months, as investors were rattled by reports of Israeli missiles hitting Iran, and the heightened Middle East tensions triggered a scramble for safe haven assets.

The Hang Seng Index lost 1 per cent to 16,224.14 on Friday, bringing the loss this week to 3 per cent. The Tech Index slipped 2.4 per cent, while the Shanghai Composite Index lost 0.3 per cent.

E-commerce group Alibaba tumbled 1.8 per cent to HK$66.70 and food delivery platform Meituan slipped 2.5 per cent to HK$95.30. Li Auto tumbled 7.4 to HK$106.30, the lowest level since January 31, as the cutthroat competition in the electric vehicle (EV) intensified after the vehicle maker priced its new model cheaper than Tesla’s bestseller model. Rival BYD declined 2 per cent to HK$201.20 and Geely Auto lost 2.7 per cent to HK$8.81.

Risk appetite soured on Middle East tensions. Iran’s state media said the country had activated its air defence system after reports of explosions near the Iranian city of Isfahan. Oil prices soared taking Brent past the US$90 per barrel mark briefly.

General view of Hong Kong Exchange Square in Central. Photo: Jelly Tse.

“Recent reports of an Israeli aerial bombardment targeting a key nuclear facility in central Isfahan have sparked a significant shift out of risk assets and into safe-haven investments,” said Stephen Innes, a managing partner at SPI Asset Management.