Shanghai: Chinese and Hong Kong stock markets plummeted on Monday as investor anxiety deepened over an escalating global trade war that could tip the world economy into recession.
Hong Kong’s Hang Seng Index (.HSI) nosedived over 10% during morning trading, putting it on track for its steepest single-day decline since the 2008 global financial crisis. Banking shares led the collapse, with Hong Kong-listed stocks of HSBC and Standard Chartered plunging by 15%.
On the mainland, the CSI300 (.CSI300) blue-chip index dropped more than 5%, with nearly every sector seeing heavy selling pressure. The yuan fell to its lowest level since January, while bond markets saw a sharp rally as investors sought safety.
The market turmoil followed Beijing’s retaliatory move on Friday to impose additional tariffs on U.S. imports after Washington hiked tariffs to over 50% on Chinese goods. The intensifying conflict between the world’s two largest economies is threatening to disrupt global trade routes and amplify risks to China’s already slowing economy.
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Solar companies (.CSI931151) and household appliance manufacturers (.CSI930697) suffered around 10% losses on the mainland, as trade-sensitive sectors bore the brunt of the sell-off. Meanwhile, the Hang Seng Volatility Index (.VHSI) surged to its highest level since October, signaling heightened investor fear.
“With no signs of retreat from the White House, all eyes are now on Beijing,” said one analyst. “Markets are expecting new stimulus measures to bolster Chinese exporters and stabilize domestic growth.”
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Tech heavyweights Alibaba (9988.HK) and Tencent (0700.HK) were also not spared, with both companies seeing their shares fall by more than 8%.
