HK Stock Market Move | Airline stocks strengthen across the board as midterm elections ease geopolitical premium and carriers' jet fuel cost pressure is expected to ease.

Airline stocks rose across the board today. As of press time, CHINA EAST AIR (00670) gained 8.76% to HK$2.73; CHINA SOUTH AIR (01055) rose 7.56% to HK$3.13; Air China Limited (00753) climbed 6.92% to HK$4.015; CATHAY PAC AIR (00293) advanced 3.20% to HK$15.14. On the news front, the results of the U.S. midterm elections have come in, with the Democratic Party unexpectedly sweeping both the Senate and the House, leaving the Trump administration facing the risk of becoming a "lame duck." On Wednesday, Brent crude oil plunged by more than 10% at one point, falling below US$95. U.S. Vice President Vance publicly attributed the Republican election defeat to the Iran war, further reinforcing market expectations that the Trump administration will seek diplomatic channels to avoid an escalation of conflict. Senate Democratic leader Schumer also pledged to push for an end to the Iran war. For the aviation industry, oil prices are the most direct variable on the income statement. In the first three quarters of this year, the three major airlines posted a combined loss of RMB8.435 billion, all citing the sharp rise in jet fuel costs as the main reason for the change in performance. Wanlian Securities previously noted that if oil prices fall going forward, the core factor weighing on airline stocks will ease, and the sector has considerable room for recovery.