U.S.-Iran temporarily ceasefire, Hengke surges over 4% in half a day, analyst: turning point not reached

Southern Finance, 21st Century Business Herald Reporter Yuan Sijie, Hong Kong Report

Encouraged by news that the US and Iran reached a temporary ceasefire agreement and that international geopolitical tensions have significantly eased, the Hong Kong stock market opened sharply higher on the first trading day after the Easter and Qingming holidays, with the three major indices all gaining strength. By midday, the Hang Seng Index was at 25,821.88 points, up 2.81%; the State-owned Enterprise Index was at 8,656.06 points, up 2.35%; and the Hang Seng Tech Index was at 4,885.87 points, up 4.42%.

According to Xinhua News Agency, U.S. President Trump posted on social media on the evening of the 7th that after a call with Pakistan, he agreed to suspend bombing and attacks on Iran for two weeks, provided Iran agrees to open the Strait of Hormuz “comprehensively, immediately, and safely.”

Xinhua also reported that Pakistani Prime Minister Shahbaz Sharif posted on social media early on April 8 that Iran, the United States, and their allies have agreed to an immediate ceasefire in all regions, including Lebanon, “with immediate effect.” Shahbaz stated that he welcomes the upcoming negotiations in Islamabad on April 10 between U.S. and Iranian delegations to reach a final agreement aimed at resolving all disputes.

Buoyed by these developments, Hong Kong stocks opened sharply higher this morning, with the Hang Seng Index opening 656 points higher, a 2.61% increase; the Hang Seng Tech Index opened 137 points higher, up 2.95%. After the market opened, sentiment continued to ferment, and the Hang Seng Index intraday gains expanded to as much as 3%, reaching 25,872.3 points.

In the market, large technology stocks, as market bellwethers, all strengthened, with internet stocks surging across the board. By midday, Alibaba rose 4.47%, Meituan rose 9.84%, Bilibili increased over 5%, and SenseTime surged over 9%. The semiconductor sector performed strongly, with Huahong Semiconductor up over 14% and Semiconductor Manufacturing International Corporation up over 8%. The non-ferrous metals sector also gained strength, with Jiangxi Copper rising over 9% and Zijin Mining jumping 6.68%.

Affected by the US-Iran ceasefire news, international oil prices experienced intense volatility. By midday, Hong Kong oil and gas stocks came under pressure, with CNOOC down 3.55%, PetroChina down 2.04%, and Shandong Moluon falling over 10%.

Meanwhile, the aviation sector rose due to the dual benefits of falling oil prices and improved travel sentiment. By midday, Air China rose 5.44%, China Southern Airlines increased 5.68%, and Cathay Pacific gained over 4%.

On the capital side, southbound funds in the first quarter had a net inflow of over 220.8 billion HKD, becoming an important support for the bottom of the Hong Kong stock market.

The sustainability of the current US-Iran ceasefire remains a core variable of market concern. The ceasefire is set for two weeks, and the outcome of the Islamabad negotiations on April 10 remains uncertain. Whether the Middle East situation can truly cool down from this remains highly uncertain. Against this backdrop, how will the Hong Kong stock market evolve in the future?

Boda Capital International CEO Wen Tianna told reporters that the recent ceasefire news essentially reflects short-term risk appetite sentiment, rather than a fundamental reversal of the underlying logic of Hong Kong stocks. The two-week window and the significant uncertainty surrounding the Islamabad negotiations mean this is more like a “breath” rather than a “turning point.” The long-term core anchors of Hong Kong stocks still firmly depend on the recovery of the mainland economy, the implementation pace of structural policies, and the tightening or loosening of global liquidity.

Senior investment strategist Duan Nairong of Royal Bank of Canada Wealth Management told reporters that the short-term boost from the ceasefire, especially the rebound in growth stocks, is likely a sentiment release rather than a fundamental improvement—many preconditions retained in the announcements by both sides lay the groundwork for future fluctuations. Investors should prepare for continued volatility and actively enhance the “antifragility” of their portfolios.

Looking ahead, Wen Tianna suggests that investors remain cautiously optimistic in the short term (1-2 weeks), viewing pullbacks as tactical entry opportunities, but must strictly adhere to stop-profit and stop-loss rules. From a 1-3 month perspective, investors should return to fundamentals and performance, recommending reducing exposure to cyclical energy stocks and shifting focus toward policy-supported, reasonably valued, and high-performing sectors such as technology hardware, semiconductors, and high-end manufacturing. Additionally, controlling positions, diversification, southbound funds, and trading volume are factors to watch closely.

Regarding specific allocations, Duan Nairong said that if investors already hold oil stocks at low levels, they can continue to wait for the lagging benefits of Middle Eastern supply recovery, but currently chasing high is not cost-effective.

Duan Nairong also recommends that Hong Kong stock investors focus on the lithium battery industry chain and high-dividend stocks: the accelerated construction of global energy security continues to benefit these sectors, with the dual demand growth for energy storage and power batteries providing strong support for profitability; meanwhile, telecom stocks and Hong Kong bank stocks, after adjustments, are re-emerging as valuable options for stable capital allocation.