The Hang Seng Index lost more than half its value in Hong Kong’s 1997 crash before recovering.
The Hang Seng Index tracks major companies listed on the Hong Kong Stock Exchange and is the territory’s best-known equity benchmark. During the Asian financial crisis, pressure on regional currencies, fears about Hong Kong’s exchange-rate system, and intense speculative selling produced an exceptionally violent market decline.
The index fell from its August 1997 peak to a low in January 1998, a drop of more than 50 percent. Hong Kong authorities also intervened directly in financial markets during August 1998, buying shares to counter speculative pressure. That intervention remains a notable episode in the history of the territory’s markets.
The crash is often grouped with the wider 1997 Asian financial crisis, but the events were not identical. The crisis began with Thailand’s baht problems and spread through several Asian economies; the Hang Seng’s collapse was Hong Kong’s major stock-market manifestation of that regional turmoil.