Hong Kong stocks declined on Monday as investors grew cautious after U.S.-Iran talks collapsed, with plans to blockade Iranian ports adding to uncertainty.

The Hang Seng Index fell 232.69 points, or 0.9%, to close at 25,660.85, while the Hang Seng China Enterprises Index dropped 52.98 points, or 0.6%, to 8,602.06.

U.S. President Donald Trump said Sunday that the Navy would begin blockading the Strait of Hormuz, putting a fragile two-week ceasefire at risk.

The U.S. Central Command said the blockade, set to begin on Monday, will apply to all vessels entering or leaving Iranian ports and coastal areas.

Meanwhile, Iran's Islamic Revolutionary Guard Corps warned that any military vessels approaching the strait would be treated as violating the ceasefire and met with a decisive response.

The escalating tensions rippled through commodity markets, with oil prices climbing above $100 a barrel, while gold slipped to a near one-week low as a stronger dollar weighed on demand.

In corporate news, Joy Spreader (HKG:6988) surged nearly 99% after partnering with Beijing Volcano Engine Technology to deploy artificial intelligence across its operations.

Meanwhile, Victory Giant Technology (HKG:2476, SHE:300476) launched a Hong Kong listing to raise up to HK$17.5 billion, moving ahead with one of the city's largest listings this year despite Middle East-driven market volatility.