HK Stock Market Move | Airline stocks lead the way with significant gains, as international oil prices drop significantly amid the US-Iran talks. Institutions suggest that short-term aviation fuel costs may have already peaked.

Airline stocks lead the gains, as of the time of writing, Air China Limited (00753) rose 10.14% to 4.89 Hong Kong dollars; China Eastern Airlines (00670) rose 8.19% to 3.7 Hong Kong dollars; China Southern Airlines (01055) rose 7.48% to 3.88 Hong Kong dollars; and CATHAY PAC AIR (00293) rose 2.61% to 12.17 Hong Kong dollars. On the news front, the United States and Iran have confirmed reaching an agreement, and it is expected that the Strait of Hormuz will soon reopen, leading to a significant drop in international oil prices on Monday. It is reported that the International Air Transport Association (IATA) previously estimated that global aviation fuel expenses would increase to around $350 billion by 2026, exceeding the $252 billion in 2025, with fuel costs accounting for nearly 1/3 of airlines' operating costs. CMSC released a research report stating that in the face of cost pressures, there has been a significant decline in short-term passenger traffic. Considering the changes in international aviation fuel prices and the existing transmission mechanisms, the marginal change dimension, short-term aviation fuel costs may have peaked. Despite expectations of easing tensions between the US and Iran in the near term, there is still a need to be vigilant of short-term fluctuations in oil prices due to geopolitical factors and the maintenance of high absolute levels in the medium term eroding profits. It is recommended to pay attention to the impact of Middle Eastern tensions and oil price changes on industry operations and sector sentiment.