The Hang Seng Index suffered its largest one-day fall during the 1997 Asian financial crisis on October 28, 1997.
Hong Kong’s market fell sharply as investors feared contagion from the crisis that had begun with pressure on Thailand’s baht and spread through Asian financial markets. On October 28, the Hang Seng Index dropped 1,438 points, a decline of about 13.7 percent.
Hong Kong’s linked exchange-rate system limited monetary flexibility because the Hong Kong dollar was pegged to the US dollar. The territory’s authorities defended the currency and raised interest rates, measures that contributed to severe pressure on shares and property-related assets.
The episode is sometimes confused with Black Monday in 1987, which also caused a major Hong Kong market collapse. October 28, 1997, belongs instead to the Asian financial crisis, a regional episode involving currency devaluations, debt burdens, capital flight, and banking stress.