Hong Kong Hang Seng Index Plunges by 3021 Points, Creating the Largest Decline in History

Amid escalating trade tensions between the US and China, concerns about intensified trade conflicts and the potential for economic downturn have led to the Hong Kong stock market plunging below the 20,000-point threshold. Hong Kong stocks experienced a “Black Monday” today, with the Hang Seng Index closing down by 3021 points or 13.22% at 19828 points, marking the largest single-day decline in history. Total trading volume for the day reached a record high of HKD 620.8 billion.

Stocks across various sectors in the Hong Kong market recorded significant declines, with nearly no Chinese enterprises listed in Hong Kong spared. Technology stocks, banks, insurance, chip makers, and restaurant businesses saw drops ranging from 10% to 20%, with Alibaba falling by 17.97% to HKD 101.3, Tencent down by 12.53% to HKD 435, and BYD dropping by 15.9% to HKD 315.

The Hang Seng Tech Index plummeted by 17.61% to close at 4401 points.

Market analysts cited by the Central News Agency believe that as there has been no indication of contact between China and the US regarding the ongoing trade war, the Hong Kong stock market continues to face uncertainties, with the possibility of further declines not ruled out.

On April 7th, China’s three major stock indices also experienced significant drops. The Shanghai Composite Index fell by 7.3%, marking the largest decline in five years; the Shenzhen Component Index dropped by 9.66%, breaking below the 10,000-point level; while the ChiNext Index saw a 12.5% decline. The total trading volume for A-shares amounted to RMB 1.5878 trillion for the day.

On April 2nd, US President Trump announced the implementation of equal tariff measures on all trading partners, including a 34% tariff increase on Chinese imports, added to the previous 20% tariffs, resulting in a total tariff rate of 54% on Chinese goods and an average weighted tariff of up to 66%, reaching historic highs.

The Chinese authorities announced on April 4th a series of retaliatory measures, including a 34% tariff increase on all US-imported goods, the prohibition of import and export activities with six US-based companies related to China, as well as export controls on seven rare earth-related products.

However, it is widely believed that China’s countermeasures may backfire, with even domestic experts rarely publicly opposing China’s retaliatory measures.

On April 6th, He Bin, former Deputy Director of the Public Policy Research Center at the Chinese Academy of Social Sciences, posted a comment on social media, stating, “This is a completely wrong ‘countermeasure,’ akin to ‘if you hit your wife, I will hit mine.’ ” He also described China’s countermeasures as “lifting a rock only to drop it on one’s own foot.” On the same day, the Chinese Academy of Social Sciences announced the revocation of He Bin’s membership in the Public Policy Research Center.

Currently, the market is concerned that these measures may lead to consequences such as the relocation of China’s supply chains and the withdrawal of foreign capital, triggering a domino effect.

On April 6th, Hong Kong Financial Secretary Paul Chan reiterated in a blog post that Hong Kong would continue to maintain its status as a free port. This indicates that the Hong Kong government will not follow the mainland in implementing a 34% tariff increase on US imports.