Hong Kong’s Hang Seng Index experiences the biggest decline in nearly three decades due to President Trump’s tariff announcements.
The Hang Seng Index in Hong Kong witnessed its sharpest single-day decline in almost three decades as panic selling ensued following United States President Donald Trump’s tariff announcements.
On Monday, the financial hub’s benchmark Hang Seng Index closed down by 13.22 percent, after falling as much as 13.74 percent during the day.
This decline is the steepest for Hong Kong stocks since the index plummeted by 13.7 percent in a single day during the 1997 Asian financial crisis. In comparison, during the 2007-2009 global financial crisis, the index experienced its worst day with a fall of 12.7 percent.
The dramatic drop occurred after Trump increased his tariffs overnight and China announced its plans to retaliate with a 34 percent tariff on US imports.
Carlos Casanova, a senior economist at UBP in Hong Kong, attributed the market’s reaction to Trump’s tariffs and China’s retaliation, stating that it is a “double whammy.” He emphasized that the magnitude of the recent measures is unprecedented, as previous retaliatory measures targeted less than 1 percent of China’s total imports.
“We’re in uncharted territory,” Casanova said.
Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, noted that Hong Kong offers a more accurate gauge of the market’s expectations regarding the impact of tariffs on China’s economy compared to Chinese mainland stock markets. This is due to the ability to trade freely and short Chinese stocks in Hong Kong.
On the day of the decline, Hong Kong stocks suffered the most among Asia’s markets, with equities in mainland China, Japan, South Korea, Taiwan, Australia, and Singapore experiencing significant drops. Since Trump’s tariff announcements, global stock markets have lost trillions of dollars in value.
The US began imposing a baseline tariff of 10 percent on imports and plans to introduce steeper duties between 11 percent and 50 percent. US stocks have already shed more than $6 trillion in value. Further steep losses are expected when Wall Street reopens, with futures tied to the benchmark S&P500 and the tech-heavy Nasdaq-100 trading down.
On Monday, the financial hub’s benchmark Hang Seng Index closed down by 13.22 percent, after falling as much as 13.74 percent during the day.
This decline is the steepest for Hong Kong stocks since the index plummeted by 13.7 percent in a single day during the 1997 Asian financial crisis. In comparison, during the 2007-2009 global financial crisis, the index experienced its worst day with a fall of 12.7 percent.
The dramatic drop occurred after Trump increased his tariffs overnight and China announced its plans to retaliate with a 34 percent tariff on US imports.
Carlos Casanova, a senior economist at UBP in Hong Kong, attributed the market’s reaction to Trump’s tariffs and China’s retaliation, stating that it is a “double whammy.” He emphasized that the magnitude of the recent measures is unprecedented, as previous retaliatory measures targeted less than 1 percent of China’s total imports.
“We’re in uncharted territory,” Casanova said.
Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, noted that Hong Kong offers a more accurate gauge of the market’s expectations regarding the impact of tariffs on China’s economy compared to Chinese mainland stock markets. This is due to the ability to trade freely and short Chinese stocks in Hong Kong.
On the day of the decline, Hong Kong stocks suffered the most among Asia’s markets, with equities in mainland China, Japan, South Korea, Taiwan, Australia, and Singapore experiencing significant drops. Since Trump’s tariff announcements, global stock markets have lost trillions of dollars in value.
The US began imposing a baseline tariff of 10 percent on imports and plans to introduce steeper duties between 11 percent and 50 percent. US stocks have already shed more than $6 trillion in value. Further steep losses are expected when Wall Street reopens, with futures tied to the benchmark S&P500 and the tech-heavy Nasdaq-100 trading down.
