The Hang Seng Index suffered the largest one-day percentage loss in Hong Kong stock-market history on October 28, 1997.
The index fell 13.7% that day as investors reacted to the Asian financial crisis and fears that the Hong Kong dollar’s currency peg could come under pressure. The sell-off followed sharp market declines across East and Southeast Asia and intense speculation against regional currencies.
Hong Kong maintained its linked exchange-rate system, introduced in 1983, by defending the Hong Kong dollar against pressure. The monetary authority raised interest rates and intervened in markets, actions that contributed to severe volatility in shares and property. The territory’s economy entered a recession after the crisis.
The Hang Seng Index is a free-float-adjusted, market-capitalization-weighted benchmark of major companies listed in Hong Kong. It is not a measure of every Asian market, and the 1997 event should not be confused with the Hong Kong crash during the global financial crisis of 2008.