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Source: Newsmaker.id
The Hang Seng Index tumbled 2.7%, or 667 points, to close at 23,943 on Friday (Oct 2), marking its largest daily drop since July 2026. The decline occurred as the Hong Kong market reopened following the National Day holiday, amidst a global sell-off of risk assets and elevated US bond yields.
The yield on the 10-year US Treasury note briefly hit 5.34%, its highest level since 2002. This rise was driven by concerns that high energy prices and massive investments in the AI sector could sustain inflationary pressures and keep interest rates elevated.
Oil prices also drew attention, with Brent crude hovering around US$102.6 per barrel due to fears of supply disruptions in the Middle East. China's decision to halt exports of refined fuel products further added pressure to energy markets and weighed on stock market sentiment.
The technology sector was among those under pressure due to high yields and US restrictions on advanced AI hardware. Tencent fell 1.9%, HKEX weakened 2.4%, Trip.com dropped 3.0%, and Xiaomi plunged 4.4%, while AIA recorded a 5% decline.
Market pressure was exacerbated by the absence of capital inflows via the Southbound Stock Connect scheme, as mainland Chinese stock exchanges remained closed. This situation cut off a key source of liquidity for Hong Kong stocks at a time when investors are grappling with heightened global uncertainty.
Looking ahead, investors will closely monitor Treasury yields, oil prices, global interest rate policies, and geopolitical developments. The combination of energy-driven inflation and high funding costs remains a critical factor likely to influence sentiment toward Hong Kong stocks in the near term.
Source: Newsmaker.id