Hong Kong stocks waver after overnight sell-offs in US

The Hang Seng Index slipped 0.1 per cent to 23,309.27 by 10.24am, backsliding after a gain of as much as 1.2 per cent. The Hang Seng Tech Index gained 1.1 per cent, while mainland China’s CSI 300 index gained 0.1 per cent.

A rebound in South Korean stocks lifted sentiment across the region, offsetting the fallout of the brutal US sell-offs on Tuesday. The Nasdaq 100 index plunged 3.3 per cent and the S&P 500 dropped almost 2 per cent, battered by a rout in technology stocks as investors showed unease over the rapid pace of share price rises for artificial intelligence firms.

“The market has entered a more dangerous stretch of the cycle, where returns can remain positive but arrive with much higher volatility,” said Stephen Innes, a managing partner at SPI Asset Management. “The sell-off was not solely a valuation adjustment around Korean chip names. It was a collision between a crowded AI narrative and a leveraged market structure.”

South Korea’s Kospi index was in focus in Asian markets, with price swings amplified by the leveraged trading. The gauge rebounded by as much as 4.6 per cent after a 10 per cent plunge on Tuesday that at one point triggered a circuit breaker.

Korean investors had reduced their leveraged bets and overseas traders had pulled out to solidify their gains made in trades on stocks listed under Kospi, the world’s best-performing major index this year. South Korean stocks had been riding the AI wave buoying global markets, with memory chip manufacturers like Samsung Electronics and SK Hynix benefiting considerably.