Hang Seng Suffers Sharpest Drop Since July

The Hang Seng Index plunged 2.7%, or 667 points, to 23,943 on Friday, marking its largest one-day decline since July 2026, as a renewed selloff in global risk assets weighed on Hong Kong shares following the National Day holiday. The decline came amid elevated US Treasury yields, with the 10-year yield hitting 5.34%, its highest since 2002, as rising energy costs and strong AI-related investment fueled inflation and interest-rate concerns. Oil prices remained elevated, with Brent around US$102.6 a barrel over concerns on Middle East supply disruptions and China's suspension of refined-fuel exports. Technology stocks remained under pressure amid higher yields and US restrictions on advanced AI hardware, while geopolitical tensions further dampened sentiment. The selloff was also amplified by the absence of Southbound Stock Connect flows as mainland markets remained closed. Notable laggards included Tencent (-1.9%), AIA (-5.0%), HKEX (-2.4%), Trip.com (-3.0%) and Xiaomi (-4.4%).