Hang Seng Index News: Hang Seng Slides as Israeli Strikes and Oil Rally Rattle Markets

Israeli Attacks on Iranian Sites Trigger Flight-to-Safety

Oil jumps 10%, Asia stocks tumble on surprise Israeli strikes. Global markets reeled on Friday, June 13, as news broke of Israel attacking Iranian nuclear and missile factory sites while also targeting key military personnel. Fears of an Israel-Iran conflict and potential oil supply disruptions pressured Hong Kong and Mainland China markets.

The overnight attacks followed easing US-China trade tensions as President Trump and China’s President Xi bid to reach an elusive trade agreement.

An escalation in Israel-Iran tensions could trigger a wider regional conflict, potentially sending crude oil prices above $80. A lasting spike in oil prices may revive inflationary pressures and fuel global economic uncertainty, supporting demand for safe-haven assets.

Concerns about Middle East tensions, the US-China trade agreement, and Beijing’s silence on stimulus weighed on market sentiment. The Hang Seng Index extended its losses from Thursday, with tech and EV stocks facing heavy losses.

Market focus will remain on the Middle East, trade headlines, and Beijing’s stimulus-related news. These factors may determine whether the Hang Seng Index drops below 23,500 or retargets 24,500.

Hang Seng Index Dips as EV and Tech Stocks Stumble

US equity markets posted gains on June 12, with the Nasdaq Composite Index rising 0.24%, as US economic data supported a more dovish Fed stance, offsetting Middle East concerns. Notably, US markets closed before the news hit the wires of Israel attacking Iran. Meanwhile, the Hang Seng Index dropped 0.70% to 23,867 in early trading on June 13. Mainland China’s markets also succumbed to risk aversion, with the CSI 300 and Shanghai Composite Index falling 0.76% and 0.72%, respectively.

EV and Tech Stocks Fall as Markets React to Israeli Attacks

Investor fears of an Iranian retaliation to the Israeli attacks and a wider regional conflict weighed on demand for tech and EV stocks. Tech heavyweights Alibaba (09988) and JD.com (09618) fell 1.75% and 0.91%, respectively, sending the Hang Seng TECH Index down 2.08%.

EV stocks extended Thursday’s losses, with BYD (01211) and Li Auto (02015) tumbling 4.17% and 2.66%, respectively. A regional Middle East conflict could impact EV demand amid increasing government scrutiny of price strategies and the ongoing price war between key players.

Israel Attacks Key Iranian Sites Triggering a Flight to Safety

On Friday, June 13, news broke of Israel attacking Iranian nuclear, missile factories, and military sites, fueling demand for safe-haven assets. Supply disruption fears sparked a 10% rally in crude oil prices, rising to a high of $74.615. A lasting spike in crude oil prices may stoke inflation and central banks’ policy easing goals, potentially fueling global economic uncertainty.

While market jitters eased in morning trading, Iran’s response and any follow-up retaliatory measures by Israel could intensify demand for safe-haven assets, impacting global equity markets. Conversely, any signs of de-escalation may lift sentiment, supporting demand for risk assets.

Key Levels: 23,500 Support or 24,500 Breakout?

On June 13, the Hang Seng Index dropped back toward its mid-May to early June congestion zone, falling below 24,000 for the first time in four sessions. Middle East tensions fueled the sell-off.

A break below 23,750 may expose the 23,500 level and potentially the 50-day Exponential Moving Average (EMA). Conversely, a breakout above 24,000 could open the door to retesting resistance at the June 11 high of 24,439. Any stimulus moves from Beijing or de-escalation in Middle East tensions would likely accelerate a move toward 24,500.

Hang Seng Technical Outlook

• Resistance: 24,000, then 24,439.
• Support: 23,750, 23,500, then the 50-day EMA at 23,142 and 23,000.
• Short-term Bias: Bullish, contingent on trade developments, Middle East headlines, and stimulus plans.

Forecast Summary: Will Iran Deliver a Measured Response, or Will 23,500 Give Way First?

The Hang Seng Index hovers around its May-June congestion zone. Concerns about the latest Israeli attack on Iran and regional stability will remain a headwind. However, sentiment could improve if Iran downplays the attack and delivers a measured military response. Resistance at 24,000 will likely limit any upside until there is more clarity on Iran’s intentions.

The Kobeissi Letter quoted JPMorgan’s views on the prospects of an Iran response and its impact on crude oil prices, stating:

“An attack on Iran could spike oil prices to $120, driving US CPI inflation to 5%.”

On inflation and the Fed rate path, the Kobeissi Letter added:

“President Trump’s top priority has been lower energy prices for lower inflation. An attack driving oil prices to $120 would put rate HIKES back on the table.”

In this scenario, the Hang Seng Index could face increased selling pressure, bringing 23,000 into sight.

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