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The Hang Seng China Enterprises Index, which tracks major Chinese stocks listed in Hong Kong, dropped as much as 2.3% on June 22, pushing it to nearly 20% below its October 2, 2025 peak. That’s the textbook definition of a bear market, and the index is now teetering right on the edge of one.
What’s driving the selloff
May retail sales in China contracted for the first time since the pandemic. Domestic travel during the Dragon Boat Festival holiday came in flat year-over-year.
Alibaba Group and Tencent Holdings, two of the heaviest weights in the HSCEI, were among the largest contributors to the index’s decline.
A tale of two indexes
While Hong Kong-listed Chinese stocks cratered, the onshore CSI 300 Index told a completely different story on the same day. The CSI 300 closed up 2.4% on June 22, reaching its highest level since December 2021.
In Hong Kong, a limited rebound came through financial shares like China Life Insurance and Postal Savings Bank of China. Sectors tied to artificial intelligence also faced selling pressure.
The MSCI China Index also flirted with bear market territory. It fell 2.1% in a prior session and briefly dipped more than 20% below its October high before recovering slightly.
Bloomberg’s data paints an even starker picture. The HSCEI ranked as the second-worst performer among more than 90 global indexes tracked year-to-date.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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