The Hang Seng Index plunged during the 1997 Asian financial crisis as pressure mounted on Hong Kong's currency peg.
Hong Kong maintained a linked exchange rate between the Hong Kong dollar and the U.S. dollar. Speculators tested the system during the regional crisis, while high interest rates and uncertainty placed heavy pressure on shares. The Hang Seng Index fell sharply in late October 1997, including a record one-day point decline on October 28.
The Hang Seng Index is a benchmark for major companies listed in Hong Kong. It is not the same as the Nikkei 225 of Japan or the Shanghai Composite of mainland China. Hong Kong's monetary authorities defended the currency system and also intervened in the stock market in August 1998, an unusual step that later contributed to the creation of the Tracker Fund of Hong Kong.