Hong Kong stocks rallied as Iran and Israel appeared to announce a peace deal.
The HK50 jumped to 24,177 after finding support at the October high of 23,232. That will provide support for the uptrend with highs at 24,876.
US President Donald Trump announced a tentative ceasefire agreement between Iran and Israel, adding to risk appetite and easing concerns about oil disruption. The CSI 300 jumped 2.1%, with the same move higher in the Shanghai Composite Index.
Trump said on Monday that Israel and Iran had agreed to a 24-hour truce just days after his strike on Iran’s territory. Iran had attacked US air bases in return and threatened to shut a major shipping lane for crude oil.
Global investors are looking at Hong Kong as a reliable safe haven due to the city’s strength in stock markets and wealth management, according to Hong Kong Financial Secretary Paul Chan Mo-po.
Despite an uncertain global political and economic environment, Hong Kong’s status as a free port and its strong legal system is a key reason why foreign investors are choosing the Hong Kong market over domestic Chinese stocks.
The average daily volume on the Hong Kong stock exchange has grown to HK$240 billion this year, while IPO fundraising is leading the world.
“It is expected that within the next two to three years, Hong Kong will become the world’s leading cross-border asset management center,” Chan added.
As European and US stocks stutter at all-time highs, the flows into Hong Kong should remain supported as a diversification opportunity.
The Middle East situation has cooled on a “tentative” agreement, but caution is still advised as stocks approach their recent highs. The levels noted on the HK50 give the support and resistance for a breakout higher or a correction. A consolidation period is also possible if traders show indecision.
