Hong Kong's Hang Seng Index plunged 13%, marking its biggest drop since the 1997 Asian financial crisis, Bloomberg reports.
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Trade war as a detonator
The main trigger for the crash was the escalation of the trade war between the US and China. Beijing's response to fresh tariffs imposed by Donald Trump fueled panic in the market, triggering a sell-off and record trading volumes.
Who suffered the most?
China's tech sector was hit particularly hard, with the tech index plunging 17%. Big Chinese players listed in Hong Kong were also unlucky, with all 50 companies in the Hang Seng China Enterprises losing value. Even government funds' efforts to shore up the market were in vain.
Widespread influence
Chinese bonds also fell across the region, with investment-grade spreads jumping to 40 basis points, signaling growing mistrust among traders. The plunge was the most dramatic sign yet of how the trade war is eroding Hong Kong's financial stability.
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