HK Stock Market Move | Aviation stocks continue to rebound from yesterday's decline, signaling an improvement in the situation in the Middle East. Institutions believe that the unfavorable sentiment towards aviation may be eased.

Airline stocks continued their rebound from yesterday, with as of the time of writing: China Eastern Airlines (00670) up 4.88% at 3.87 Hong Kong dollars; Air China Limited (00753) up 3.11% at 4.98 Hong Kong dollars; China Southern Airlines (01055) up 2.43% at 4.21 Hong Kong dollars; and CATHAY PAC AIR (00293) up 1.06% at 12.43 Hong Kong dollars. On the news front, there are signs of improvement in the situation in the Middle East. According to reports, the United States is in discussions with multiple mediators for a high-level peace talk with Iran as soon as this week, but is still waiting for a response from Tehran. The report stated that the US has presented Iran with a ceasefire proposal with 15 items, and that Iran has made concessions on some key terms, however there is currently no concrete evidence that an agreement has been reached. CMSC pointed out that with the deterioration of the situation in the Middle East and the blockade of the Strait of Hormuz, oil prices have risen rapidly recently, causing a significant impact on airline stocks. If the situation in the Middle East improves in the future, the negative sentiment suppressing airlines and boosting oil prices may also be alleviated; however, there is a need to remain vigilant about the short-term rapid increase in oil prices and the erosion of profits from maintaining high oil prices in the medium term.