HK Stock Market Move | Airlines stocks collectively decline as tensions between the US and Iran fluctuate and oil prices rebound. Institutions suggest that the short-term drop in passenger flow is expanding due to cost pressures.

Aviation stocks collectively fell, as of the time of writing, China Eastern Airlines (00670) fell by 4.45%, to 3.65 Hong Kong dollars; Capital Airport (00694) fell by 3.45%, to 1.68 Hong Kong dollars; China Southern Airlines (01055) fell by 3.59%, to 3.76 Hong Kong dollars; Air China Limited (00753) fell by 2.45%, to 4.78 Hong Kong dollars. On the news front, on May 28, oil prices rebounded significantly, with WTI and Brent crude rising by over 4%. On the 27th, the US military carried out a strike on a ground drone control station in the southern Iranian port city of Bandar Abbas. The Iranian Islamic Revolutionary Guard Corps issued a statement on the 28th stating that in the early hours of that day, the US military bombed a location in the outskirts of Bandar Abbas, and subsequently the Revolutionary Guard targeted the US military airbase that launched the attack. CMSC points out that with high oil prices in April, airlines have reduced flights and the growth rate of supply has slowed. Short-term passenger flow has widened under cost pressure, considering the changes in international aviation fuel prices and the existing transmission mechanism, the marginal change dimension, short-term aviation fuel costs may have peaked; profit dimension still needs to be vigilant against short-term fluctuations in oil prices affected by geopolitics and the maintenance of high absolute levels in the medium term eroding profits; it is suggested to pay attention to the impact of oil price changes on industry operations and sector sentiment.