Hong Kong stocks plunge as investors lose confidence in China stimulus
The Hang Seng index fell 2.9% and tech shares dropped 4.6% after Beijing's limited stimulus measures failed to lift market expectations.
The Hang Seng index tumbled 2.9% and Hong Kong's technology stocks sank 4.6% as market sentiment soured over Beijing's modest stimulus package announced before the National Day holiday, which included mortgage interest subsidies for low-priced first-time homes. Mainland markets mirrored the decline, with the CSI300 down 1.3% and the Shanghai composite off 0.9%, nearing the 20% drop that defines a technical bear market.
Stronger-than-expected third-quarter growth, driven by export gains, further dampened expectations for additional policy easing. A global retreat from AI-related equities added to the pressure on Chinese markets. Sector-specific indexes such as ChiNext and Shanghai's STAR50 also fell, and major Hong Kong tech firms Tencent and Alibaba led the losses. Market participants expect the panic selling to subside, but recovery may be gradual.
Why it matters
The decline signals reduced confidence in Chinese policy support, affecting regional markets and investors worldwide.
How this story developed
- Oct 13 Asian markets tumble as US chip slump drags South Korean shares below 3%
- Oct 14 US semiconductor index fell 2.7% and the Nasdaq 100 slipped 0.7%, widening the regional decline.
- Oct 15 CoreWeave’s shares dropped 6% and its 2031 bond yields rose above 16% as investors fret over its $50 billion debt load and AI-related borrowing.
- Oct 16 CoreWeave rebounded 6% after a steep decline, lifting broader semiconductor shares.
- Oct 18 CoreWeave’s bond yields rose above 16 % and default‑insurance costs jumped to about 1,000 basis points.
- Oct 20 Asian markets slipped following earlier AI‑stock rebounds, as funding concerns and lower oil prices outweighed the US chip rally.
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