The Hang Seng Index dipped 363 points, or 1.4%, to 25,730 on Tuesday, trimming earlier gains as expectations for progress in Washington-Tehran talks continued to fade. Sentiment turned more cautious after a fresh escalation in Middle East tensions, with reports of renewed strikes on maritime targets near the Strait of Hormuz and damage to port facilities across parts of the Gulf, marking the most serious flare-up since a fragile ceasefire was reached several weeks ago. At the same time, oil markets prices held firm triggered by the renewed tensions, with traders reacting to reports of disrupted shipping activity and heightened risks to energy facilities in the Middle East. In Hong Kong, the renewed escalation revived fears that the fragile truce could break down and potentially push the region back into a prolonged period of instability. Among major decliners included Tencent Holdings (-1.4%), Trip.com (-2.2%), Xiaomi Corporation (-1.9%), AIA Group (-2.1%), and SMIC (-1.6%).

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