Hong Kong stocks slumped Monday as markets braced for a prolonged Middle East conflict and continued volatility in oil prices.

The Hang Seng Index fell by around 894.85 points, or roughly 3.5%, to end at 24,382.47, while the Hang Seng China Enterprises Index decreased by 266.25 points, or around 3.1%, to close at 8,307.82.

Brent crude hovered just below $115 after Iran and the United States traded fresh threats over the weekend, dampening hopes for a resolution to the war as it entered its fourth week.

With no de-escalation in sight, markets are increasingly betting on a monetary tightening by global central banks, dimming the appeal of risk assets, the South China Morning Post reported.

In corporate news, two firms launched their initial public offerings in Hong Kong while another two made their debut.

Chinese direct-to-customer networking equipment provider FS.com (HKG:3355) rose 13% in its first day of trading after shares closed at HK$47.20 per share.

Chinese integrated circuit design company Nsing Technologies' (HKG:2701; SHE:300077) shares closed at HK$11.25 per share, 4% above their initial public offering of HK$10.80.

Meanwhile, Chinese semiconductor company Shanghai FourSemi Semiconductor (HKG:3625) said it was looking to raise up to HK$600 million via an IPO. The company is offering 12 million H-shares at an indicative price range of HK$40 to HK$50 per share to build a new R&D center and enhance chip development capabilities

Creative product developer Hangzhou Tongshifu Cultural and Creative (HKG:0664) is seeking up to HK$503.7 million via its IPO of 7.4 million H-shares at an indicative price range of HK$60.00 to HK$68.00 per share.

Net proceeds will be used mainly to enhance product development and design, including building an R&D center and expanding the product portfolio.