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Hong Kong stocks slump as AI rallies in Asia unwind on US rate-increase anxiety

The Hang Seng dropped by 1.8% when markets opened, the Tech Index fell by 3.1% and the mainland’s CSI 300 Index slipped 3.1%

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Zhang Shidongin ShanghaiPublished: 9:45am, 8 Jun 2026Updated: 9:47am, 8 Jun 2026Hong Kong stocks slumped alongside other markets in Asia, as rising bets on an interest-rate increase after a blowout US jobs report raised the fear of capital outflows from the region and the unwinding of the AI rallies from the Chinese mainland and South Korea.

The Hang Seng Index fell 1.8 per cent to 24,493.50 as of 9.30am local time. The Hang Seng Tech Index dropped 3.1 per cent. The mainland’s CSI 300 Index slid 1.9 per cent, while the Nasdaq-styled Star Market 50 Index retreated 4.2 per cent.

South Korea’s Kospi index, which had more than doubled this year to emerge as the best performer among the primary markets globally, plunged more than 7 per cent, with the unwinding of leveraged trading amplifying sell-offs. Taiwan’s Taiex sank 4.3 per cent, and Japan’s Nikkei 225 shed nearly 4 per cent.

AdvertisementRising Treasury yields and mounting expectations about financial tightening risk compressing the valuations of the technology stocks, which have been priced to perfection and led the global markets to all-time highs this year.

The back and forth of a diplomatic path to end the Middle East tensions has also weighed on the rally, with crude oil prices remaining elevated to make inflation persistent.

02:28South Korean day traders double down on stock market amid historic volatility

“Strong employment creates stronger growth expectations. Stronger growth keeps inflation risks alive. Persistent inflation keeps pressure on bond yields. Higher yields tighten financial conditions,” Stephen Innes, a managing partner at SPI Asset Management, said.

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