Hong Kong’s stock exchange was the first major market to crash during the global sell-off of October 1987. The Hang Seng Index fell dramatically on October 19, before the panic reached Europe and the United States.
Hong Kong’s collapse reflected the international nature of the market shock. Investors were responding to concerns about valuations, interest rates, currency arrangements, trade disputes, and computer-driven selling. Because markets opened at different times, the decline moved westward through the world’s financial centers.
The crash became known as Black Monday in many countries, although local market dates differed because of time zones. The U.S. Dow Jones Industrial Average suffered its largest one-day percentage loss on October 19. Hong Kong’s early fall therefore helped reveal how closely linked major markets had become.