Hang Seng Index Drops by Approximately 13%

The Hang Seng Index (Hong Kong 50 on FXOpen) plunged by more than 13% after opening with a significant bearish gap following the weekend.

According to reports, this marks the most substantial one-day drop since the 1997 Asian financial crisis.

Hang Seng Index Chart Analysis

A month ago, in our review of the Hang Seng’s upward trend (Hong Kong 50 on FXOpen), we pointed out that:
→ Investor enthusiasm around artificial intelligence was continuing to fuel the rally;
→ However, the price was in a vulnerable position for a potential pullback.

We also noted that future developments would be largely influenced by the broader economic context, particularly the ongoing tariff dispute between China and the U.S.

Since then, the Hang Seng Index (Hong Kong 50 on FXOpen) has decreased by about 17%, following President Trump’s decision to impose harsher-than-expected tariffs, with China countering with retaliatory measures.

Hang Seng Outperforms Other Markets

Despite the sharp decline on Monday, the Hang Seng has been performing better than many other indices. The chart above illustrates that, unlike:
→ the ASX 200 (Australia 200 on FXOpen);
→ the S&P 500 (US SPX 500 mini on FXOpen);
→ and other European and Japanese indices,
the Hang Seng remains positive for 2025.

What’s Next for the Market?

Market sentiment is highly responsive to tariff-related news. For example, Bloomberg reported that a post on social media platform X suggested President Trump might consider a 90-day pause on tariffs (excluding China), which sparked optimism about a potential recovery.

If President Trump opts to ease the previously announced tariffs, it could act as a catalyst for a global stock market rebound.

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