HK Stock Market Move | Hong Kong bank stocks continue to decline as tensions in the Middle East escalate, putting pressure on profits for HSBC and Standard Chartered.

Hong Kong bank stocks continued to decline, as of the time of writing, HSBC HOLDINGS (00005) fell 4.02% to 119.5 Hong Kong dollars; STANCHART (02888) fell 2.95% to 157.7 Hong Kong dollars; BANK OF E ASIA (00023) fell 2.42% to 13.29 Hong Kong dollars. On the news front, tensions in the Middle East are escalating rapidly. U.S. President Trump issued an "ultimatum" to Iran on March 21, demanding that it unconditionally open the Strait of Hormuz within 48 hours, or else Iran's power plants will be destroyed. Iran quickly responded, threatening to completely close the strait and strike key facilities of the U.S. and its allies. It is worth noting that the U.S. Citibank branches in Dubai, United Arab Emirates, and Manama, Bahrain, were previously attacked by drones. JPMorgan Chase released a research report stating that the stock prices of HSBC HOLDINGS and Standard Chartered bank have both experienced adjustments this month, reflecting investors' concerns about the impact of the Middle East conflict and exposure to private credit risks. The bank assumes that exposure to the Middle East could lead to a 10% and 14% decline in profits for HSBC and Standard Chartered, respectively; Standard Chartered is more sensitive to the Middle East conflict, while HSBC has a larger exposure to private credit risks. The bank believes that the stock prices of HSBC and Standard Chartered have largely reflected potential downside scenarios, and now is an appropriate time to start building positions.