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Hong Kong Stocks Tumble as U.S.-Iran Tensions Escalate; Nio Advances on SUV Launch

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Hong Kong stocks slumped Thursday as renewed U.S. military action against Iran and reports of fresh missile attacks in Kuwait rattled sentiment and undermined hopes for a peace deal.

The Hang Seng Index fell 1.3%, or 322.07 points, to close at 25,006.16, while the Hang Seng China Enterprises Index dropped 1.2%, or 98.61 points, to finish at 8,364.41.

The U.S. military launched fresh strikes targeting an Iranian drone operation that Washington said threatened U.S. forces and commercial shipping in the Strait of Hormuz, Reuters reported, citing a U.S. official.

The strikes came hours after President Donald Trump dismissed Iranian reports suggesting a deal had been reached to restore traffic through the strategic waterway.

Meanwhile, oil prices climbed more than 2% after Iran's Revolutionary Guards said they had targeted a U.S. airbase in response to an earlier U.S. attack on the port city of Bandar Abbas.

In corporate news, Nio (HKG:9866, SGX:NIO) closed over 6% higher after unveiling its flagship ES9 electric SUV in China.

CIG Shanghai's (HKG:6166, SHA:603083) Hong Kong shares advanced 11% after unveiling plans to raise about HK$1.98 billion through a stock offering.

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US Equity Indexes Edge Higher as Crude Oil Slumps, Tech Giants Take Breather

US equity indexes ground higher amid a slump in crude oil prices as investors parsed ongoing talks to end the war against Iran and as tech mega-cap names consolidated.The Dow Jones Industrial Average traded up 0.4% to 50,644.28 on Wednesday. The Nasdaq Composite edged up less than 0.1% to 26,674.74, and the S&P 500 climbed less than 0.1% to 7,520.36. Both the Nasdaq and the S&P 500 were declining earlier in the day.Consumer discretionary, consumer staples, and communication services topped the gainers at the close. Energy and financials led the decliners. Among the stocks with a market capitalization of more than $200 billion, seven of the ten worst performers were technology companies, led by Qualcomm (QCOM) and Arm (ARM).The memorandum of understanding being negotiated between Tehran and Washington will call for US forces to withdraw from Iran's vicinity and lift the blockade of Iranian ports in return for reopening the Strait of Hormuz to pre-war levels, CNN reported, citing Iranian state television. The US denied claims that maritime traffic through the Strait of Hormuz could return to normal within a month of the Iran deal, Bloomberg reported.During an ongoing Cabinet meeting on Wednesday, President Donald Trump said he won't be rushed into a deal, warning that Iran's efforts to outlast him won't work because he doesn't "care about the midterms," CNN reported."Iran is very much intent; they want very much to make a deal. So far, they haven't gotten there ... We're not satisfied with it, but we will be. Either that, or we'll have to just finish the job," Trump said, without elaborating, according to a report from Reuters. "The deal has got to be perfect," he added, insisting that no single country would have control over Hormuz.West Texas Intermediate crude oil futures sank 4.8% to $89.35, and Brent crude futures slumped 4.7% to $94.91.Most US Treasury yields fell, with the 10-year down one basis point to 4.48%. The two-year slipped 1.5 basis points to 4.04%.In economic news, Redbook US same-store sales jumped 9% from a year earlier in the week ended May 23 after an 8.1% gain in the prior week. "Demand for a wide variety of summer, home and garden, and seasonal apparel products was the main focus for most consumers," Redbook said.The Dallas Federal Reserve's monthly general business services index improved to minus 7.7 in May from minus 9.9 in April, versus the minus 6.0 anticipated.The Richmond Fed's monthly manufacturing index rose to 13 in May from 3 in April, more than the 4 estimate in a Bloomberg-compiled survey.In company news, Boston Scientific (BSX) shares sank 12%, the worst performer on the S&P 500, after Chief Executive Mike Mahoney said at an industry conference that this year has been "a bit more of a challenge" than anticipated. Stifel adjusted its price target on Boston Scientific shares to $75 from $85 while maintaining its buy rating, a move mirrored by Goldman Sachs.Zscaler (ZS) stock plunged 32%, the steepest decline in the Nasdaq, after the company issued a fiscal Q4 revenue outlook that missed analysts' expectations. Zscaler stock remains in the penalty box until further evidence of traction emerges in the security operations business, new sales leader roles are filled, and the operating structure improves, Morgan Stanley said in a research report.In precious metals, gold futures dropped 1.1% to $4,452.1, and silver futures slumped 2.3% to $74.87.

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Asia Markets

US Equity Indexes Trade Mixed Amid Sharp Sell-Off in Crude Oil

US equity indexes traded mixed but were off session lows amid a sharp decline in crude oil prices and a retreat in government bond yields.The Dow Jones Industrial Average rose 0.4% to 50,675.1 after midday on Wednesday. The Nasdaq Composite declined 0.2% to 26,596.5, and the S&P 500 was down 0.1% at 7,509.9. Both the Nasdaq and the S&P 500 traded lower earlier in the session.Energy and financials led the decliners intraday, while consumer discretionary and consumer staples topped the gainers. Technology recovered partially from intraday declines.The memorandum of understanding being negotiated between Tehran and Washington will call for US forces to withdraw from Iran's vicinity and lift the blockade of Iranian ports in return for reopening the Strait of Hormuz to pre-war levels, CNN reported, citing Iranian state television. The US denied claims that maritime traffic through the Strait of Hormuz could return to normal within a month of the Iran deal, Bloomberg reported.During an ongoing Cabinet meeting on Wednesday, President Donald Trump said he won't be rushed into a deal, warning that Iran's efforts to outlast him won't work because he doesn't "care about the midterms," CNN reported.West Texas Intermediate crude oil futures dropped 4.3% to $89.85, and Brent crude futures slumped 4.1% to $95.54.Most US Treasury yields fell, with the 10-year down 1.6 basis points to 4.47% and the two-year lower by 2.1 basis points to 4.03%.In economic news, Redbook US same-store sales jumped 9% from a year earlier in the week ended May 23 after an 8.1% gain in the prior week. "Demand for a wide variety of summer, home and garden, and seasonal apparel products was the main focus for most consumers," Redbook said.The Dallas Federal Reserve's monthly general business services index improved to minus 7.7 in May from minus 9.9 in April, versus the minus 6.0 anticipated.The Richmond Fed's monthly manufacturing index rose to 13 in May from 3 in April, more than the 4 estimate in a Bloomberg-compiled survey.In company news, Boston Scientific (BSX) shares sank 12%, the worst performer on the S&P 500, after Chief Executive Mike Mahoney said at an industry conference that this year has been "a bit more of a challenge" than anticipated. Stifel adjusted its price target on Boston Scientific shares to $75 from $85 while maintaining its buy rating, a move mirrored by Goldman Sachs.Zscaler (ZS) stock plunged 31%, the steepest decline in the Nasdaq, after the company issued a fiscal Q4 revenue outlook that missed analysts' expectations. Zscaler stock remains in the penalty box until further evidence of traction emerges in the security operations business, new sales leader roles are filled, and the operating structure improves, Morgan Stanley said in a research report.In precious metals, gold futures dropped 1.4% to $4,440.1, while silver futures dropped 2.3% to $74.82.

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Asia Markets

Exchange-Traded Funds, US Equities Mixed After Midday

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