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Hong Kong stocks likely to rise amid escalating Middle East tensions




Hong Kong stocks were largely flat by mid-morning, with the main benchmark index rising just 0.05 per cent, but they still bucked the global market slump sparked by escalating tensions in the Middle East.

The benchmark Hang Seng Index rose 14.08 points to 30,911.79, while the Hang Seng China Enterprises Index edged down 0.11 per cent to 12,310.77.

Oil and energy stocks led the rally, helped by surging oil prices. PetroChina increased 2.53 per cent to HK$5.67. Sinopec Corp added 1.35 per cent to HK$7.5. China National Offshore Oil Corporation rose 3.33 per cent to HK$12.4.

Brent, the benchmark for international oil prices, surged to a three-year high US$72 on Wednesday after US President Donald Trump warned Russia to “get ready” for a US missile attack on Syria, whose government Moscow has backed during its civil war.

“Three major reasons will continue to support oil prices: [Saudi Crown Prince] Mohammad Bin Salman’s push before the Saudi Aramco IPO, the Syria crisis and inflationary pressures seen across major economies,” said Louis Tse Ming-kwong, managing director of VC Asset Management.

Brett McGonegal, chairman and chief executive of Capital Link Investment Holdings, said oil prices are unlikely to continue to rise in the near term, but that a weakening US dollar means Trump has plenty of reasons to think Syria will continue to have a negative economic impact.

All three major US indices moved lower Wednesday, as Trump weighed his options for potential military action.

The Dow Jones Industrial Average finishing 0.9 per cent lower at 24,189.45. The S&P 500 lost 0.55 per cent to 2,642.19, and the Nasdaq Composite edged down 0.36 per cent at 7,069.03.

Minutes from the March Federal Open Market Committee meeting also weighed down on the market as it showed most officials leaning toward a faster pace of hikes.



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