Hong Kong stocks and cryptocurrencies are expected to slide this week after the Sino-US trade conflict escalated, with investors seeking refuge in gold.
US President Donald Trump’s announcement of 100 percent tariffs on Chinese goods from November 1 — along with possible curbs on key software exports — has fueled fears of a global risk-off wave.
Dow Jones and S&P 500 lost 1.9 percent and 2.7 percent respectively on Friday. Hang Seng night futures slumped 1,314 points.
Francis Kwok Sze-chi, vice chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, said the Hang Seng Index could drop by at least 1,000 points at today’s open, calling the pullback “unavoidable” after months of strong gains.
“The correction may last three to six weeks,” Kwok said, noting that even with a rebound later, “the focus will be on consolidation rather than regaining all the losses.”
He added that both Hong Kong and US equities are undergoing a “normal adjustment” after hitting record highs, but market pressure will persist until there is clarity before Trump’s November 1 tariff deadline.
The Hang Seng Index has rallied more than 8,000 points in the past six months, from a low of 19,260 in April to over 27,000 in early October — a rise that analysts say left the market vulnerable to shocks.
Kenny Ng Lai-yin, securities strategist at Everbright Securities International, expects the index to hover near 24,880 points in the short term.
“Panic selling is unlikely,” Ng said. “The market is largely in wait-and-see mode for a potential meeting between Trump and President Xi Jinping.” He said export and trade-related stocks are likely to be hit hardest, citing the April episode when Trump’s tariff threats triggered a similar dip.
Independent analyst Kenny Wen Kit said tech shares could face the steepest losses due to their high beta and rich valuations, though he expects the sell-off to be “relatively mild.”
Meanwhile, the cryptocurrency market suffered its biggest liquidation in history over the weekend, with nearly US$20 billion (HK$156 billion) in leveraged positions wiped out across global exchanges, according to Coinglass.
Bitcoin plunged over 20 percent from its recent all-time high above US$126,000 to near US$100,000 on Saturday before stabilizing around US$112,000.
In contrast, gold has regained its traditional role as a safe haven. Bank of America said bullion could surge to US$6,000 per ounce by next spring, citing historical cycles showing average 300 percent gains across past gold bull markets.
