FX.co ★ Hong Kong Shares Plummet to 2-Month Low on Mounting U.S.-China Trade War

Hong Kong's stock market experienced a significant decline on Monday, with the Hang Seng Index dropping 2,144 points or 9.4% to 20,710 in early trading. This marked the continuation of a severe two-day downturn, bringing the index to its lowest level in two months. The sharp sell-off was fueled by widespread panic as investors sought to offload riskier assets amidst an intensifying global trade war and increasing fears of an upcoming recession. On the preceding Friday, China responded to prior U.S. measures by imposing a 34% tariff on American goods and announced new trade restrictions, including immediate export controls on rare earth materials destined for the U.S. Additionally, Beijing added 16 U.S. companies to its export control list and classified 11 more as "unreliable entities." Concurrently, U.S. stock futures suffered significant losses, with little indication of the White House relaxing its stance, despite a two-day decline in Wall Street markets following President Trump's broad tariffs on key trading partners. Among the early affected stocks were Pop Mart International (down 15.3%), Kuaishou Technology (down 12.7%), Geely Automobile (down 12.5%), Trip.com (down 11.9%), and Li Auto (down 10.7%).