Advertisement
Hong Kong stock market
BusinessChina Business

Hong Kong stocks record biggest drop in a week as Chinese equities stumble

Mainland benchmarks fall by the most since a run-up began, on fears that regulators will intervene to rein in recent outsize gains

3-MIN READ3-MIN
Listen
A screen on a pedestrian overpass in Shanghai shows stock indexes on August 18, 2025. Photo: VCG via Getty Images
Zhang Shidongin Shanghai
Hong Kong stocks fell by the most in a week, taking cues from Chinese equities that suffered from the biggest sell-off since the bull run started in June on concerns that recent gains were too fast.

The Hang Seng Index fell 1.1 per cent to 25,058.51 at the close, adding to a 1.1 per cent loss over the past two days. The Hang Seng Tech Index dropped 1.9 per cent.

Benchmark gauges on the mainland tumbled across the board, recording a third day of losses. The CSI 300 Index slumped 2.1 per cent, the steepest decline since a 7.1 per cent plunge on April 7 when the US imposed tariffs on global trading partners. The Shanghai Composite Index retreated 1.3 per cent, and the Star Market 50 Index of the tech board on the Shanghai exchange, the market leader of the rally, tumbled 6.1 per cent.

Advertisement
A fast run-up that catapulted the Shanghai Composite Index to a decade high last week fanned concerns about an asset bubble and a lack of fundamental support, with China’s key economic data showing a broad-based slowdown in July. Fear has also been growing among investors that Chinese regulators will intervene to rein in the excessive stock gains, with measures including acceleration of new stock supply and selling by state buyers. Nomura Holdings warned of the risk of frothy stocks and the limited impact of rising stocks on boosting the economy in two reports issued over the past week.

“Sentiment on the [mainland] A-share market will provide a drag on Hong Kong stocks at least in the near term,” said Zhang Yidong, an analyst at Industrial Securities. “The regulatory guard against a fast bull market and profit-taking pressure after the rapid gains will lead to a consolidation and gyration on A shares in September.”

Advertisement

Chinese yuan-traded stocks added more than US$1 trillion in market value over the past month, as a rotation from fixed-income products and bank savings spurred a surprising run. Hopes of reflation also ignited the buying spree after Beijing initiated reductions of outdated capacity in an array of green-energy industries and started to build a mega hydropower station in Tibet, which analysts said would boost commodity prices.

Advertisement
Select Voice
Select Speed
1.00x