Hang Seng Index: Geopolitical Fears Weigh as Trump Mulls Iran Strike

Israel-Iran Conflict – Markets on Edge as US Strike Threat Looms

Reports of President Trump approving attack plans for Iran spooked investors, triggering a flight to safety. The news followed earlier reports of US fighter jet deployments to the Middle East. An escalation in the Israel-Iran conflict raised the prospects of a US intervention as hopes of peace talks faded.

The Hang Seng Index came under intense pressure on June 19, with EV, real estate, and tech stocks falling deep into negative territory.

Investors remain focused on the Israel-Iran conflict, US trade policy, and stimulus measures from Beijing. These factors will likely determine whether the Hang Seng Index breaks below 23,000 or retargets 24,000.

Hang Seng Index Extends Losses on Geopolitical Tensions

US equity markets closed mixed on June 18, with the Nasdaq Composite Index up 0.13% and the Dow and S&P 500 dropping 0.10% and 0.03%, respectively. However, Asian markets fared worse. The Hang Seng Index fell 2.02% to 23,232 during the morning session on June 19. Mainland China’s markets also declined, with the CSI 300 and Shanghai Composite Index down 0.78% and 0.86%, respectively.

EV, Real Estate, and Tech Stocks Drive Market Declines

Fears of a US strike on Iran weighed heavily on Hong Kong and Mainland China markets. The Hang Seng Mainland Properties Index tumbled 2.42%. Tech heavyweights Alibaba (09988) and Baidu (09888) slid 1.96% and 1.56%, respectively, sending the Hang Seng Tech Index down 2.38%.

EV stocks mirrored the broader downtrend, with BYD (01211) and Li Auto (02015) shedding 2.51% and 1.34%, respectively.

Middle East Escalation: Trump’s Strike Plan Fuels Uncertainty

Overnight reports of President Trump approving attack plans for Iran underscored the sharp escalation in the Middle East conflict. According to media outlets, US officials are preparing for a possible strike on Iran, potentially as early as this week, though Trump has yet to give the green light. His comment – “I may do it. I may not do it” – left the markets on edge.

News of the US deploying supercarrier USS Gerald R. Ford to the Mediterranean fueled fears of an imminent military strike.

Technical Setup: 23,000 Support in Focus as Risks Mount

On June 19, the Hang Seng Index slid below the key 23,500 support level and tested the 50-day Exponential Moving Average (EMA). The geopolitical crisis and US-China trade uncertainty continue to impact risk appetite.

A ceasefire in the Middle East or progress on a US-Iran nuclear agreement could support a move toward 24,000. A sustained break above 24,000 may open the door to retesting the June 11 high of 24,439. Conversely, US military action could push the index down to 23,000. Increased selling pressure may bring 22,500 into sight. Any stimulus chatter from Beijing may offer some relief.

Hang Seng Technical Outlook

• Resistance: 23,500, 24,000, and then 24,439.
• Support: 50-day EMA at 23,230, 23,000, then 22,500.
• Short-term Bias: Bullish but contingent on geopolitical developments, trade headlines, and stimulus-related news.

Outlook: Ceasefire Relief or Breakdown Below 23,000?

The Hang Seng Index has dropped to the lower band of its recent congestion range. Market fears about US involvement and a broader regional conflict remain headwinds. A de-escalation in the conflict and discussions about a US-Iran nuclear agreement would boost market sentiment. In the meantime, resistance at 23,500 may cap any rebound attempts without fresh catalysts.

What’s next for the Hang Seng? Stay informed with real-time updates as geopolitical risks and US-China developments drive sentiment. Follow our live coverage and consult our economic calendar.