AbdulQadir7
FULL MEMBER
- Joined
- Aug 7, 2024
- Messages
- 1,238
- Reaction score
- 0
- Country
- Location
Hang Seng Index Crash
In the early hours of 7 April 2025, Hang Seng of Hong Kong Index fell sharply from 9.1% to 10.21%. Rising tensions in the US & China trade war and mounting concerns about a worldwide recession were the catalysts for this steep decline and a wider market slump throughout Asia.
Causes of the Market Decline
A major factor in the recent collapse of the Hang Seng Index was the growing trade war between the United States and China, after the administration of President Donald Trump levied tariffs on Chinese goods that exceeded fifty percent, China responded by imposing duties of its own on imports into the United States, many industries have seen widespread selling as a result of the escalation in trade tensions, with banking stocks like HSBC and Standard Chartered seeing a 15% decline.
Impact on Other Markets
Other Asian markets also experienced a decline, with the CSI300 index in mainland China falling by more than 5%, the Shanghai Composite Index falling by 5.48%, and the Japan Nikkei 225 also experiencing significant losses, falling by 6.48%, the global impact was evident as Wall Street stock futures plummeted, with Dow Jones futures down more than 1,500 points and S&P 500 futures down more than 4%.
Effect on the Economy
It is anticipated that the trade war will have a significant effect on China's economy, possibly reducing GDP growth by 25 basis points in 2025, China credit rating was reduced from A+ to A by Fitch Ratings, which cited high tariffs and a possible global downturn, this situation highlights how intertwined global markets are and how countries must enact supporting policies to sustain their economy.
Market Volatility and Investor Sentiment
Increased investor nervousness was reflected in the Hang Seng Index's volatility, which hit its highest level since October. With losses of more than 8%, IT behemoths Tencent and Alibaba were among the worst performances, the spotlight has switched to Beijing for actions to assist Chinese exporters and stabilize the home economy because the White House has shown no signs of de-escalation.
Conclusion
The catastrophic effects of the U.S.-China trade war on international financial markets are demonstrated by the collapse of the Hang Seng Index, investors are preparing for possible long-term economic repercussions, such as a worldwide recession, as tensions continue to rise, the circumstance highlights the necessity of diplomatic measures to settle the trade dispute and bring stability back to global markets.
In the early hours of 7 April 2025, Hang Seng of Hong Kong Index fell sharply from 9.1% to 10.21%. Rising tensions in the US & China trade war and mounting concerns about a worldwide recession were the catalysts for this steep decline and a wider market slump throughout Asia.
Causes of the Market Decline
A major factor in the recent collapse of the Hang Seng Index was the growing trade war between the United States and China, after the administration of President Donald Trump levied tariffs on Chinese goods that exceeded fifty percent, China responded by imposing duties of its own on imports into the United States, many industries have seen widespread selling as a result of the escalation in trade tensions, with banking stocks like HSBC and Standard Chartered seeing a 15% decline.
Impact on Other Markets
Other Asian markets also experienced a decline, with the CSI300 index in mainland China falling by more than 5%, the Shanghai Composite Index falling by 5.48%, and the Japan Nikkei 225 also experiencing significant losses, falling by 6.48%, the global impact was evident as Wall Street stock futures plummeted, with Dow Jones futures down more than 1,500 points and S&P 500 futures down more than 4%.
Effect on the Economy
It is anticipated that the trade war will have a significant effect on China's economy, possibly reducing GDP growth by 25 basis points in 2025, China credit rating was reduced from A+ to A by Fitch Ratings, which cited high tariffs and a possible global downturn, this situation highlights how intertwined global markets are and how countries must enact supporting policies to sustain their economy.
Market Volatility and Investor Sentiment
Increased investor nervousness was reflected in the Hang Seng Index's volatility, which hit its highest level since October. With losses of more than 8%, IT behemoths Tencent and Alibaba were among the worst performances, the spotlight has switched to Beijing for actions to assist Chinese exporters and stabilize the home economy because the White House has shown no signs of de-escalation.
Conclusion
The catastrophic effects of the U.S.-China trade war on international financial markets are demonstrated by the collapse of the Hang Seng Index, investors are preparing for possible long-term economic repercussions, such as a worldwide recession, as tensions continue to rise, the circumstance highlights the necessity of diplomatic measures to settle the trade dispute and bring stability back to global markets.
