Chinese and Hong Kong stock markets plunged on Monday as mounting fears over a widening global trade war triggered a wave of panic selling and raised the specter of a deep global recession.
Hong Kong’s Hang Seng Index nosedived more than 10% during morning trading—on track for its worst single-day drop since the 2008 financial crisis. Banking giants bore the brunt, with HSBC and Standard Chartered shares plummeting 15% in Hong Kong.
On the mainland, China’s CSI300 blue-chip index shed over 5%, with broad-based losses across nearly every sector. The Chinese yuan also weakened to its lowest level since January, while government bonds rallied as investors sought safety.
The dramatic market rout followed China’s retaliatory tariffs on U.S. goods announced Friday, a direct response to Washington imposing levies on over 50% of Chinese exports. The escalating conflict between the world’s two largest economies is fueling fears of disrupted global trade, declining Chinese corporate earnings, and a broader economic slowdown—particularly as China’s domestic growth continues to sputter.
Industries sensitive to trade pressures were hit hard, with indexes tracking solar firms and household appliance manufacturers dropping around 10%. The Hang Seng Volatility Index surged to its highest level since October, reflecting heightened investor anxiety.
Tech giants weren’t spared either—shares of Alibaba and Tencent each fell over 8% amid the turmoil.
With no signs of de-escalation from the White House, investor attention now turns to Beijing for possible stimulus measures aimed at supporting exporters and stabilizing the domestic economy.
