The Hong Kong and Mainland China markets were closed on Friday, April 4, for the Ching Ming Festival.
The Hang Seng Index, which tracks the some of the largest mainland Chinese technology companies listed in Hong Kong, tumbled 10.21% as at 9.52 am local time on Monday.
The losses were broad-based and were led by the basic materials, healthcare, consumer cyclicals and technology sectors.
Meanwhile, Hong Kong’s Hang Seng Technologies Index fell 12.11%.
Among the worst performers in the index were Sunny Optical Technology Group, which declined 17.16%, BYD Electronic International, which fell 16.85%, and Lenovo Group, which lost 16.58%.
Tech giants Alibaba (09988.HK) and Baidu (09888.HK) were trading with losses of 10.93% and 10.08%, respectively.
Meanwhile, Mainland China’s equity markets were also trading with losses. The CSI 300 fell 5.42%, while the Shanghai Composite Index dropped 5.48%.
Fitch Ratings responded by downgrading China from A+ to A, with a stable outlook. The rating agency also forecast GDP growth of 4.4% in 2025, down from 5.0% in 2024, citing the unexpectedly high tariffs and a likely global slowdown.
The quick retaliation by China, following Trump unleashing the steepest increase in tariffs in a century last week, has raised the odds of a global recession.
Goldman Sachs Group Inc. has cut its 12-month targets for Chinese equity indexes in a report on Sunday. The MSCI China Index target was cut to 81 from 85, while the CSI 300 Index outlook was lowered to 4,500 from 4,700 over the same time frame.
Meanwhile, stock futures on Wall Street sank on Sunday evening, putting the indices on course for yet another troublesome day of trading after a two-day rout wiped out over $5 trillion in investor wealth.
Futures on the Dow Jones are down over 1,500 points, while those on the S&P 500 are down over 4%. If this fall holds, the index would join the Nasdaq and the Russell 2000 in a bear market, meaning a 20% correction from the top.
In response, US President Donald Trump said that while he does not want anything going down, sometimes medicines need to be taken to fix something.
With agency inputs