Advertisement
Hong Kong stock market
BusinessChina Business

Hong Kong stocks rebound from choppy trading triggered by overnight turmoil in US

Hang Seng Index bounces back after overnight plunge in Nasdaq-100 on concerns about frothy tech valuations

2-MIN READ2-MIN
5
Listen
The logo of Hong Kong Exchanges and Clearing. Photo: Reuters
Zhang Shidongin Shanghai
Hong Kong stocks rebounded on Wednesday afternoon after a jittery morning session, bucking overnight tumult in US markets spurred by concerns over frothy tech company valuations and an unwinding of leveraged bets on South Korean chipmakers.

The Hang Seng Index had risen 0.3 per cent to 23,412.18 by market close, after a seesawing morning session with multiple changes of direction. The Hang Seng Tech Index gained 1.8 per cent, while mainland China’s CSI 300 Index added 0.5 per cent.

A rebound in South Korean stocks helped restore some investor confidence across the Asia-Pacific 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 stocks were in focus in Asian trading, with price swings amplified by the leveraged trading following the launch of exchange-traded funds linked to individual stocks. The Kospi index rallied by as much as 4.6 per cent on the day after a 10 per cent plunge on Tuesday that at one point triggered a circuit breaker.

Korean investors rolled back their leveraged positions and overseas traders pulled out to solidify gains made in trades on stocks listed under the 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.
Advertisement
Select Voice
Select Speed
1.00x