HK Stock Market Move | Airlines stocks are under pressure as Air China Limited (00753) falls over 3% amid renewed tensions in the Strait of Hormuz and a spike in oil prices.

Airline stocks came under collective pressure this morning. As of the time of writing, Air China Limited (00753) fell by 3.09%, trading at HKD 4.23; China Eastern Airlines (00670) dropped 2.71%, trading at HKD 3.23; and China Southern Airlines (01055) declined by 2.4%, trading at HKD 3.45. In terms of news, renewed tensions in the Strait of Hormuz have triggered a strong rebound in international crude oil prices, with Brent crude rising back above USD 80. On August 6 local time, Trump expressed that the navigation agreement in the Strait of Hormuz has not been officially confirmed. Meanwhile, Iran stated that it is only negotiating new navigation regulations with Oman, while also reviewing a navigation control bill that plans to prohibit U.S. and Israeli vessels from transiting the strait, imposing hefty fines of 20% of the cargo value on violating merchant ships. A previous research report from CMSC noted that the recent U.S.-Iran situation and navigation conditions in the strait remain uncertain, and it is essential to pay attention to the impact of Middle Eastern turmoil on oil prices and sector sentiment. Currently, the sector's overall market value is at a low point since the pandemic; if cost pressures ease, it is expected to release profitability and market value elasticity.