Stock markets rise and fall, but there are days when the plunge defies gravity. The Hang Seng Index slumped 13.2 per cent on Monday, its worst drop in percentage terms since the 1997 Asian financial crisis. However, some brokers are bullish the market will soon find a bottom and rebound as it has done so many times in the past.
How bad was the slump?
The Hang Seng Index sank 13.2 per cent to 19,828.30, but the decline was far worse than those seen in other Asian markets, which slumped between 4 and 8 per cent.
While the decline wiped off the benchmark’s near 15 per cent gain in the first quarter, the gauge has lost more than 20 per cent from a recent peak, dragging it into a technical bear market.
The fall came after China on Friday imposed a tit-for-tat 34 per cent tariff on US goods following US President Donald Trump’s “Liberation Day” package on Tuesday against all its trading partners, including exports from Hong Kong and China to the US.
“There was pent up selling pressure after a public holiday on Friday in Hong Kong and mainland China,” said lawmaker Robert Lee Wai-wang, who is also the chairman of Hong Kong-based Grand Finance Group.
