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Hong Kong stocks suffered a sharp sell-off on Friday. The Hang Seng Index fell 2.6% as investors reacted to surging global bond yields and new pressure on major financial and technology shares.
The Hang Seng closed at 23,972, down roughly 640 points and at its lowest level since July. The Hang Seng China Enterprises Index declined 2.3%, while the Hang Seng Tech Index also fell about 2.3%.
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Asia stocks performance
The decline was one of Hong Kong’s steepest daily losses in months and came as investors returned from the National Day holiday.
Financial stocks were among the hardest hit. HSBC dropped 5.4% to HK$149.50, while AIA and Standard Chartered also came under pressure during the session.
Major Chinese technology stocks moved lower as well. Tencent fell around 2.3%, Alibaba lost roughly 2.1%, and Xiaomi slid about 4%. Baidu, Meituan and JD.com also traded lower during the session.
The weakness comes as investors reassess equity valuations after a sharp rise in US Treasury yields.
The US 10-year Treasury yield recently climbed above 5%, which increased concerns that borrowing costs could remain elevated for longer than previously expected. Higher bond yields can put pressure on stocks, particularly technology shares, by making future earnings less valuable relative to safer fixed-income investments.
The sell-off also comes shortly after a relatively strong third quarter for Hong Kong equities. The Hang Seng gained roughly 4.2% during Q3 despite weakness in September, which means that Friday’s decline is a noticeable change in momentum at the start of the new quarter.
Trading conditions were also unusual because mainland Chinese markets were closed for the Golden Week holiday. Stock Connect trading is suspended during the break, which removes some mainland investor participation from the Hong Kong market.
Investors are now watching US economic data closely for clues about the Federal Reserve’s next move on interest rates.
