Iran and U.S. plan a two-week ceasefire, Hang Seng Tech Index rebounds near 4,900 points | Market Watch

Ask AI · Why did the Iran-U.S. ceasefire agreement trigger a sharp rebound in Hong Kong stocks?

Tensions in the Middle East have eased, reaching a temporary ceasefire agreement, and the Hang Seng Tech Index rebounded sharply.

At the midday close on April 8, the Hang Seng Tech Index rose 4.42%, closing at 4,886 points, with a turnover of 47.4 billion HKD; the Hang Seng Index rose 2.81%, closing at 25,821 points, with a turnover of 200.5 billion HKD.

According to industry insiders interviewed by Yicai, this ceasefire is not solely the unilateral statement of U.S. President Trump; Iran also responded positively. This is different from past market expectations of ceasefires, which has led to a significant market rebound and increased trading volume. It is expected that there will be some upside space and time in the second quarter, and investors can allocate more to technology giants that have experienced significant adjustments and longer durations.

According to Xinhua News Agency, just as U.S. President Trump set a deadline for Iran, there was a new development in the Iran conflict: Pakistan announced on the 8th that Iran, the U.S., and their allies have agreed to an immediate ceasefire in all regions, including Lebanon, “with immediate effect.”

Guangda Securities international strategist Wu Lixian told Yicai that the two-week ceasefire agreement between Iran and the U.S. has sparked market expectations for subsequent negotiations, driving global stock markets higher, including Asia-Pacific markets. Hong Kong stocks may have a rebound window in the next two weeks, especially for technology stocks that have fallen significantly in recent times, which could see a relatively large rebound during this period.

He said that based on the Hang Seng Tech Index, around 5,200 points may become a resistance level for the recent rebound. Hong Kong stocks do not need to be overly pessimistic about the second quarter. The first quarter showed a pattern of rising first and falling later, with a turning point in March during the U.S.-Iran war. If the conflict is effectively managed, Hong Kong stocks may return to their previous upward trend. Additionally, the lowest point of the Hang Seng Index on March 23 was about 24,200 points, which did not break the upward channel formed since August 2024. The medium- to long-term upward trend of Hong Kong stocks remains intact, and it is expected that the market will continue in this direction, with the full-year Hang Seng Index still aiming to challenge the 30k-point mark.

Some Hong Kong stock analysts told Yicai that this ceasefire is different from the multiple unilateral proposals by Trump in the past. Iran responded positively relatively quickly and, with the mediation of countries like Pakistan, formed the ceasefire. It is expected that the ceasefire may be extended for another one or two weeks. From an asset allocation perspective, Hong Kong stocks have experienced sufficient adjustment, especially technology stocks, which have been adjusted for over half a year, with most leading stocks falling more than 30%. Investors are advised to position themselves to seize the second-quarter rebound.

Deng Lijun, a strategy analyst at Huajin Securities, believes that the release of short-term external risks and pessimistic sentiment may have been sufficiently absorbed, and policies may still lean toward positivity. In the short term, it is recommended to continue to buy on dips in sectors with upward industry trends, such as communications (AI hardware), electronics (semiconductors, AI hardware), new energy (AI power, energy storage), innovative drugs, non-ferrous metals, chemicals, and military industries (commercial aerospace).

(This article is from Yicai)