Which 1997 financial crisis included a sharp fall in Hong Kong’s Hang Seng Index in October?

The 1997 financial crisis that included a sharp fall in Hong Kong’s Hang Seng Index in October was the Asian financial crisis.

The crisis began with pressure on Thailand’s baht and spread across several East and Southeast Asian economies. Investors withdrew capital, currencies weakened, and stock markets fell. Hong Kong maintained its currency peg to the U.S. dollar, but its stock market came under intense speculative pressure. The Hang Seng Index dropped sharply in October 1997 during a period of regional turmoil.

The crisis affected Thailand, Indonesia, South Korea, Malaysia, and other economies in different ways. International rescue programs, including major support coordinated through the International Monetary Fund, were created for several countries. The crisis was not simply a stock-market event: currency mismatches, short-term foreign borrowing, property bubbles, and weak financial regulation all contributed.

Hong Kong’s market decline is sometimes mistaken for the starting point of the crisis. The initial trigger was Thailand’s currency breakdown in July 1997.