Weekly | What’s Behind the Hang Seng Plunge?
Hong Kong stocks tumbled this week, with the $HSI(HSI)$ dropping 3.97%, closing in on the key 25,000-point mark.
Trade Tensions Back in Play
On October 10, Donald Trump announced that starting November 1, the U.S. will impose an additional 100% tariff on Chinese imports — on top of existing duties. He also said the U.S. will restrict exports of “all critical software.”
The news sent Hong Kong markets reeling. The Hang Seng Index plunged over 3.5% on Monday.
After a global sell-off, Trump later tried to calm markets, saying “no need to worry about China — everything will be fine.” U.S. Treasury Secretary Bessent reaffirmed that the two heads of state are still expected to meet at the end of the month. Trade Representative Greer predicted that the market turmoil would ease this week.
External Fears Fade, Internal Cracks Show
Once external risks subsided, Hong Kong and A-share markets showed internal weakness.
Semiconductor, EV battery, and AI stocks suffered steep pullbacks.
$SMIC(00981)$ dropped more than 10%
$BABA-W(09988)$ fell 6.6%
$KUAISHOU-W(01024)$ plunged 13%
In the chip sector, some firms posted disappointing Q3 results:
CPU leader $Hygon Information Technology Co.,Ltd.(688041)$ reported profit growth of only 13%, shares fell over 5%.
Optical chip maker $Henan Shijia Photons Technology Co.,Ltd.(688313)$ saw profit down 32.5% QoQ, stock slumped 18.5%.
Meanwhile, $ASML Holding NV(ASML)$ said in its Q3 report that its China revenue will drop sharply next year, mainly due to an unusually high base in prior years.
AI, Batteries Cool Off — Risk Appetite Craters
AI hype faded, lithium stocks corrected, and risk appetite collapsed. The ChiNext Index fell 5.7% this week as investors rotated into banks and consumer staples for safety.
All sectors finished lower — Telecom, IT, and Healthcare led the decline.
Still, southbound funds flows remained strong, with HK$45.1 billion in net buying from mainland investors.
Major Events in Hong Kong Stocks This Week
1.Trump says U.S.–China trade relations will “eventually improve.”
2. $CHINA VANKE(02202)$ Chairman Xin Jie resigns.
3.Congo lifts its cobalt export ban effective Oct. 16, moves to annual export quotas.
4. $Apple(AAPL)$ CEO Tim Cook kicked off his China trip at $POP MART(09992)$ ’s “THE MONSTERS” 10th Anniversary show.
5.Ant Group’s takeover of $BRIGHT SMART(01428)$ approved by Hong Kong’s SFC.
6.A $XIAOMI-W(01810)$ SU7 in Chengdu crashed and caught fire, the driver, reportedly drunk, died; the incident sparked social backlash.
7. $INNOSCIENCE(02577)$ announced a partnership with $NVIDIA(NVDA)$ to support 800V EV architecture.
8.Fed Chair Powell hinted at another 25 bps rate cut this month amid labor market weakness.
9.Gold prices broke above $4,300/oz, hitting a record high.
10. $SANHUA(02050)$ denied rumors of a massive Tesla robot order.
11.China’s CPI in September fell 0.3% YoY, worse than the expected 0.2% drop.
12.A U.S. regional bank credit crisis sparked market panic.
13.China’s exports rose 8.3% YoY (USD terms) in September, beating forecasts.
14. $Taiwan Semiconductor Manufacturing(TSM)$ and $ASML Holding NV(ASML)$ beat Q3 expectations; TSMC said AI demand is even stronger than three months ago.
Five Stocks Worth Attention Among Top Trading HK Stocks This Week
Top1: $XIAOMI-W(01810)$ . A fatal crash involving the SU7 in Chengdu reignited controversy. Rescuers couldn’t open the doors, and the driver was reportedly drunk. SU7 resale orders cooled sharply, used orders that once traded at a ¥20,000 premium now go for around ¥2,000.
Top3: $SMIC(00981)$ . The semiconductor sector sold off hard. SMIC’s margin calls deepened as brokers cut its financing ratio. Other chipmakers like 海光信息 also posted weak Q3 results, dampening sentiment.
Top5: $ZIJIN GOLD INTL(02259)$ . Gold hit $4,300/oz amid safe-haven buying as regional U.S. banks faltered and rate cuts loomed. Zijin’s stock surged in response.
Top8: $SANHUA(02050)$ . Rumors swirled that Sanhua landed a $685 million Tesla robot actuator order, but the company denied it. Shares spiked, then retraced.
Top10: $NIO-SW(09866)$ . Singapore’s sovereign fund GIC filed a lawsuit in the U.S., accusing NIO of inflating revenues and violating securities laws, sending the stock tumbling.
Next Week's Hong Kong Stock Market Events
1. Next Monday, China will release Q3 GDP, industrial output, and retail sales data.
2. Earnings season heats up with $CATL(03750)$ $Tesla Motors(TSLA)$ $WUXI APPTEC(02359)$ reporting.
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