Hong Kong bank stocks showed a collective recovery during morning trading. At the time of writing, Standard Chartered (02888) rose 5.63% to HK$172.7. HSBC Holdings (00005) increased by 5% to HK$136.5. Dah Sing Banking Group (02356) advanced 2.74% to HK$12.76. Bank of East Asia (00023) gained 2.45% to HK$13.8.

The rebound follows news that former U.S. President Donald Trump stated on a social media platform that he agreed to suspend bombing and attacks on Iran for two weeks. The White House indicated Israel also consented to a temporary ceasefire, while Iran stated it would engage in two weeks of negotiations with the United States.

J.P. Morgan previously noted that HSBC and Standard Chartered are the European banks with the largest exposure to the Middle East, with the region contributing 4% and 12% to their respective pre-tax profits. China Securities previously pointed out that, in the short term, neither private credit risks nor Middle East geopolitical conflicts are expected to significantly impact the fundamentals of Global Systemically Important Banks (G-SIBs).

However, the core concern for the current market is a potential global economic recession triggered by the resonance of a series of latent risk events, which has also led to recent volatility in overseas banking sector stock prices. Analysts suggest that, barring a global recession, stock price declines caused by short-term risk event disturbances are expected to gradually recover, supported by strong performance and positive guidance, presenting a buying opportunity.