Tung Chee-hwa called for calm yesterday and said the plunge was inevitable but short-term.
Putting a brave face on the day's events, the Chief Executive said the exchange rate had been stabilised and currency speculators had disappeared.
'What happened this morning was a reaction to what happened around the world, particularly in New York, and from our side we don't see any panic,' he said at the end of an Executive Council meeting before afternoon trading began.
Mr Tung said the Government should not and would not intervene in the market and the US dollar peg would not be changed.
'There was no discussion on [the exchange rate] because that is not a subject for discussion,' he said. 'The fluctuation of the stock market should be adjusted by the market itself.' He urged investors to stay calm because the economy was sound. 'The performance of the stock market depends on the fundamentals of our economy,' he said.
After the market's close, Mr Tung held an emergency meeting with senior stock and futures market executives as well as the head of the securities watchdog. No details were announced.