Hong Kong’s stock market plunged on Monday, suffering its worst single-day drop since the 1997 Asian financial crisis.
#NewsAlert | Global News: Hong Kong stock turnover reaches record HK$621 bn on Monday (Agencies) pic.twitter.com/jKaRTuj3yL
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The benchmark Hang Seng Index closed down 13.22%, shedding 3,021 points to end at 19,828, its lowest level since January 23. The steep decline came amid a wave of panic selling triggered by U.S. President Donald Trump’s announcement of sweeping tariffs on the country’s trade partners.
The move has rocked global markets and stoked fears of a recession.
Nikkei 225: Japan stock market crashed 8% amid tariff woeshttps://t.co/b06J4bY2HF
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Financial Secretary Paul Chan Mo-po is set to meet with the press at 6:15 p.m. to address how Hong Kong will cope with the trade crisis and the stock market slump. Chan has warned of more volatile trading ahead but said that no drastic measures are currently warranted.
Elsewhere in the region, China’s CSI300 index also took a hit, closing down 7%. In an effort to stabilize the market and restore investor confidence, a state fund intervened.
The autocratic king in the White House acts like a mixture of the Joker and the Shakespearean Richard III, and his "great" tariffs war is about to create the worst stock crash since 1929. Chaos is his kingdom. Putin is his friend. We all loose #dkpol https://t.co/HluoVUgftw @ft
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UBS economist Carlos Casanova told reporters, “Friday was a public holiday in Hong Kong, so what we are seeing is the reaction to Trump’s tariffs and China’s retaliation.
So it’s a double whammy.” He added, “To put this into context, previous retaliatory measures targeted less than 1 percent of China’s total imports.
hang seng reacts to us tariffs
The magnitude of the last measures is unprecedented.
We’re in uncharted territory.”
Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, noted that the dip in Hong Kong offers a more accurate gauge of the market’s expectations for how the tariffs will affect China’s economy compared to the stock markets on the Chinese mainland. “The point is, you cannot trade freely in China. You cannot short Chinese stocks.
You can do all of that in Hong Kong. So it’s obviously reflecting what is going on much better than Chinese stocks,” she said. The rout in Hong Kong stocks was mirrored across Asia, with equities in mainland China, Japan, South Korea, Taiwan, Australia, and Singapore all suffering steep declines.
Since Trump unveiled the tariffs on Wednesday, global stock markets have shed trillions of dollars in value. U.S. customs authorities began imposing a baseline tariff of 10% on imports on Sunday, with steeper duties of between 11% and 50% set to go into effect on Wednesday. U.S. stocks have already shed more than $6 trillion in value since Trump’s announcement, and further losses are expected when Wall Street reopens on Monday.