Chinese stocks post biggest single-day loss since 2007-2008 Global Financial Crisis

The Chinese stock market suffered massive losses on Monday, after last week’s escalation in trade tensions between the United States and China. According to stock market index trackers, today’s plunge is the largest single-day drop in Chinese equities since the 2007–2008 Global Financial Crisis.

Per Google Finance, Hong Kong’s Hang Seng Index has plunged 12.8% to 19,910, after dropping 2,144 points in the early Monday trading sessions to reach 20,710. Several banking stocks, including Hong Kong-listed shares of HSBC and Standard Chartered, lost 15% each in the rout.

BREAKING: 🇭🇰 Hong Kong stock market index down 12%

— The Spectator Index (@spectatorindex) April 7, 2025

On the mainland, China’s CSI300 blue-chip index fell over 7%, with heavy selling seen across sectors like solar companies and household appliances. The yuan slipped to its lowest level since January, now changing hands at 7.31 per USD.

Trade standoff pushes China stock market into losses

After President Donald Trump’s administration imposed new tariffs that raised total levies on Chinese imports above 50% last Wednesday, Beijing responded on Friday with its own sweeping 34% tariffs on a range of American exports.

Some market watchers attributed the deep market slide to the Chinese government’s retaliation. “Chinese markets have taken a hit from Beijing’s retaliatory move on Trump’s tariffs,” said Qi Wang, Chief Investment Officer for Wealth Management at UOB Kay Hian, in an interview with CNBC’s “The China Connection.” 

BREAKING: Chinese stocks post biggest single-day loss since Global Financial Crisis

— The Spectator Index (@spectatorindex) April 7, 2025

Wang mentioned that in the short term, markets would continue reacting to each policy development, and could ignore any underlying fundamentals. He also noted that the European Union is closely monitoring the dispute and preparing for possible retaliatory measures from the US depending on what China will do next. 

Domestic sentiment in the United States is also becoming more volatile, voters who’ve suffered losses are growing incandescently dissatisfied with the “economic instability.” “Trump’s approval rating is taking a hit,” Wang reckoned.

Shares of Alibaba and Tencent both fell more than 8% in Hong Kong trading. Xiaomi joined the decline, along with Taiwan Semiconductor Manufacturing Company, which dropped nearly 10%. Foxconn, Apple’s main manufacturing partner, also saw a 10% decline. 

Investors are in angst at US President Trump because he seems unfazed about the current market status. Speaking aboard Air Force One on Sunday, he dismissed worries about inflation. “I don’t think inflation is going to be a big deal,” he told reporters, adding that the US would not ease tariffs unless other countries “pay us a lot of money.”

Asia-Pacific markets follow China into sharp declines

The shockwave from China’s market turmoil quickly spread throughout Asia. Japan’s Nikkei 225 fell 7.83%, reaching an 18-month low. The broader Topix index plummeted 7.79%, and circuit breakers were triggered earlier in the session, suspending Japanese futures trading temporarily.

In South Korea, Samsung Electronics fell 5.17%, while Japan’s Nintendo shed almost 8%, and could lessen pre-orders for the sequel to its popular Switch gaming console, Switch 2.

South Korea’s Kospi index was down 5.57%, while the tech-heavy Kosdaq tanked 5.25%. In India, the benchmark Nifty 50 declined 4.49%, and the BSE Sensex pared losses to 4.24%.

Australia’s S&P/ASX 200 fell 4.23%, ending the day at 7,343.30. The index has now slipped into correction territory, down 11% from its most recent high in February. 

The Australian dollar plunged more than 6% to 59.64 US cents, its lowest level since April 2020. The currency had stood at 64 cents mid-last week, before Trump’s Liberation Day tariff announcement.

Mark Baartse, a retail consultant in Australia, explained the nation imports goods globally using the US dollar, and the reliance on dollar-pegged transactions could make cost increases inevitable. 

“A lot of transactions are pegged to US dollars, regardless of where you buy from,” Baartse said, suggesting that consumers may turn to local suppliers or make purchases sooner to avoid higher prices.

Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More