[ET Net News Agency, 30 March 2026] Weighed down by the ongoing Middle East conflict, US
stocks were hammered on Friday (27th). Coupled with weak Hong Kong earnings, the HSI kept
sliding after losing the 25,000 mark. It fell as much as 542 points to 24,409 in early
trade, a one-week low, but conditions improved notably before the midday break. By lunch,
the HSI had narrowed its loss to 224 points (-0.9%) at 24,727, with main board turnover
above HKD 154.8 billion. The HSCEI stood at 8,393 (-0.7%). The HSTECH was 4,698 (-1.7%).

"Nip Chun Pong: Middle East tensions unlikely to end soon; HSI trend remains weak"

With tensions in the Middle East escalating, Asia-Pacific stocks tumbled this morning,
Japan down 4%, Korea down 3%. The HSI opened more than 400 points lower but thankfully
stabilized before midday. Nip Chun Pong, the Chief Strategist at Solo Securities, told ET
Net News Agency that as the Middle East situation deteriorates, international oil prices
have surged. After NYMEX crude broke above USD 100 per barrel last Friday, it climbed
again in Asian hours this morning, hitting as high as USD 103. He noted that the chance of
reopening the Strait of Hormuz is slim; US President Trump's earlier hope to ship oil
through the strait is unlikely to materialize in the short term. Elevated oil prices not
only weigh on the global economy but also on the US midterm elections, adding uncertainty
for both the US and the world.
Nip pointed out that the heavy concentration of bull CBBC positions is currently
clustered in three 100-point bands from 24,000 to 24,299, totalling around 3,000
contracts, close to today's low. The HSI rebounded after last week's decline but faded
again on geopolitics, so he expects the index to remain headline-driven by the Middle
East; even if it bounces, the upside should be limited. Since the conflict began, the bull
CBBC heavy zone has kept retreating, from 24,800 down to 24,200. If tensions worsen
further, the HSI could break last week's 24,200 low and test the 24,000 handle. Whether
24,000 holds will depend on developments and how bull CBBC positioning shifts at that
time. There are reports the US is preparing to send ground troops, while Secretary of
State Rubio still asserts the US can end the Middle East war within weeks. Nip sees that
as unlikely. Near term the HSI trend is weak, and short-term trading remains risky.

"Iranian strikes hit two major Middle East aluminium bases; Chalco leads on high
sensitivity to aluminium prices"

Iran attacked two ultra-large aluminium production sites in the Middle East, sending
aluminium prices surging in early trading Monday. Emirates Global Aluminium (EGA), the
region's largest aluminium producer, confirmed that its Abu Dhabi facility suffered severe
damage; reports put its 2025 aluminium casting output at 1.6 million tonnes. Aluminium
Bahrain (Alba) also said it is assessing damage to its facilities. On the LME, aluminium
spiked as much as 6% intraday to USD 3,492 per tonne.
Riding the jump in aluminium, related stocks rallied against the market. Chalco (02600)
rose as much as nearly 9%; China Hongqiao (01378) up almost 7% at one point, though gains
later eased to around 4%. Nanshan Al (02610) and Rusal (00486) also advanced. Nip said
that while Chalco reported y/y increases in both net profit and revenue, the growth was
not huge; even with a near-9% lift in the final dividend, it was the sharp rise in
international aluminium prices that really propelled the stock. Because Chalco's earnings
are more sensitive to aluminium prices, it's reasonable that it led peers today.
Nip noted that the Middle East is an important supplier of aluminium products. With the
situation deteriorating, not only exports but production itself has been disrupted,
tightening global supply. Unless there's a reversal in the region, aluminium prices are
likely to stay firm in the short term.
From a fundamentals perspective, China Hongqiao and Chalco currently trade at about
13-14x P/E, similar levels, but Hongqiao offers a higher dividend yield. Hongqiao has
fallen roughly 13% from its early-year high around HKD 41, with last week's low near HKD
30; it has since rebounded more than 10%, now about 17% below its year-start high. By
contrast, Chalco has dropped about 25% from its early-year peak near HKD 15.5. Given its
higher sensitivity to aluminium prices, if international aluminium remains strong, Chalco
likely has greater upside potential.