Hong Kong stocks closed lower Wednesday as markets questioned whether Iran and the U.S. were nearing a peace deal, even as President Donald Trump agreed to extend a truce with Tehran.

The Hang Seng Index fell by around 324.24 points, or roughly 1.2%, to end at 26,163.24, while the Hang Seng China Enterprises Index decreased by 141.76 points, or around 1.6%, to close at 8,801.78.

President Trump said the U.S. would refrain from renewing attacks on Iran until it came up with a unified proposal on a possible agreement, but that the U.S. navy would continue to maintain its blockade of the Strait of Hormuz. Iran previously refused to attend peace talks in Islamabad until the U.S. abandoned its policy of pressure and threats, Reuters reported.

It was also unclear whether talks in Islamabad would materialize as U.S. Vice President JD Vance had yet to depart Washington.

Meanwhile, a recent report from Fitch Ratings said agrochemical issuers in the Asia-Pacific were capable of cushioning against increased freight, fuel, and input costs due to the Middle East conflict, preventing near-term rating pressure.

Fitch expects supply chain disruption to not be impactful enough on the issuers' credit profiles in the near term, especially with operating flexibility and geographic diversification.

In corporate news, MTR (HKG:0066) priced its inaugural Hong Kong dollar public bond offer, also the largest in the Hong Kong market.

The public transport operator priced HK$18.8 billion in corporate green bonds, structured as a triple-tranche offering consisting of HK$8.3 billion in five year 2.88% notes; HK$7.5 billion in 10 year 3.30% notes; and HK$3 billion in 30 year 4% notes.