Hang Seng Index slides 500 points to near one-year low as insurers slump

The Hang Seng Index tumbled more than 500 points to approach a one-year low, led by a near-7% plunge in China Life and a broad selloff in mainland property stocks.

"The selloff reflects a double hit from hawkish Fed signals and lingering concerns over China's domestic economy," said Kevin Ip, equity strategist at Edgen. "Insurance and property names are bearing the brunt as investors reassess exposure to Chinese equities."

China Life Insurance Co. (01299.HK) slumped nearly 7%, making it one of the worst performers on the benchmark. Mainland Chinese homebuilder stocks also came under heavy selling pressure, with several names falling more than 5%. The decline extended the Hang Seng Index's losing streak, with the benchmark now down more than 11% from its 2026 closing high of 27,968.09 set on Jan. 29, according to Dow Jones Market Data.

The selloff followed a 500-point drop in the Dow Jones Industrial Average on Wednesday after the Federal Reserve's hawkish policy shift jolted global markets. The Hang Seng Index had already been under pressure, falling 0.98% to 24,718.10 in the week ended June 12 — its fifth consecutive weekly decline and the longest losing streak since April 2025, Dow Jones data show. The index is now within striking distance of its 52-week low of 23,237.74 set on June 19, 2025.

JPMorgan analysts said in a note that concerns over mainland Chinese visitor flows to Hong Kong have been priced into AIA Group Ltd. (01299.HK), shifting focus to growth prospects for the insurer. The broader insurance sector tracked China Life lower, while financial and property stocks extended their declines as traders weighed the impact of higher-for-longer US interest rates on Hong Kong-listed Chinese companies.

The Hang Seng Index's slide comes as investors grapple with a deteriorating macro backdrop. The S&P 500's Shiller price-to-earnings ratio sits above 41, a level not seen outside the dot-com bubble, while the index's market capitalization has reached double the trailing 12-month US gross domestic product — the highest since 1929, according to CME Group data. For Hong Kong, the key risk is that sustained US rate pressure could keep capital flowing out of emerging markets, compounding domestic headwinds from China's uneven economic recovery.

This article is for informational purposes only and does not constitute investment advice.