Finance Spotlight | Expert warns about short-term investment risk as shipping sector's stock continues to fall

The shipping and port sectors of Hong Kong stocks continued yesterday's downward trend, experiencing a collective fall this morning (June 12).

Among them, the Pacific Basin fell nearly 6%, SITC fell 4%, COSCO SHIPPING Holdings fell nearly 4%, Tianjin Port Development fell nearly 3%, China Merchants Port, Orient Overseas International fell more than 1%.

According to CCTV News reports, the United Nations Security Council on June 10 voted through the United States submitted a resolution related to the Gaza Strip, calling on Hamas and Israel to accept the ceasefire agreement. If the Red Sea shipping lanes are reopened, it will significantly shorten the mileage of European routes and reduce the demand for transportation capacity.

Last week, under the continuing influence of the Red Sea crisis, shipping and port stocks strengthened, while the relevant stocks showed a weakening trend at the beginning of this week. Yang Delong, chief economist of First Seafront Fund, said that the shipping sector was favored by capital earlier, mainly by the Red Sea crisis and other factors, but taking into account the crisis may be resolved through negotiations, the shipping sector's short-term speculative enthusiasm is expected to decline.

On the other hand, Yang mentioned that the shipping sector is currently in the downward phase of the economic cycle, coupled with the global supply of capacity being greater than demand, it is expected that the shipping sector may face a relatively large drop. He emphasized that investors should be cautious when investing in the sector and avoid chasing after the market blindly.