HK Stock Market Move | Aviation stocks rebound across the board, international oil prices fall sharply to ease market sentiment. Subsequent transmission of oil prices to airlines is expected to improve.

Airline stocks rebounded across the board. As of the time of writing, China Eastern Airlines (00670) rose by 5.73% to HK$3.32; Air China Limited (00753) rose by 4.76% to HK$4.4; China Southern Airlines (01055) rose by 4.09% to HK$3.56; and CATHAY PAC AIR (00293) rose by 1.72% to HK$11.84. On the news front, U.S. President Trump suddenly announced the cancellation of the planned air strike against Iran that evening, revealing that negotiations on the Iranian issue had received preliminary approval from multiple parties. After the news was released, international oil prices plummeted, and airline costs are expected to see a significant relief. IATA had previously predicted that aviation fuel costs in 2026 are expected to increase from $252 billion in 2025 to $350 billion. Haitong of Cathay Pacific released a research report stating that domestic aviation fuel prices in June were reduced by 15%, in line with our expectations; the coverage ratio of domestic fuel surcharges increased compared to May. The pre-sale of the summer travel season has not yet begun, and it is expected that demand and oil prices will decrease after the end of the national college entrance examination, which will ensure an increase in the transmission of airline fuel prices. The high oil prices and the off-peak season provide a counter-cyclical opportunity.