massive AI-driven rout

Over 300 global executives gathered in Hong Kong for the Global Financial Leaders' Investment Summit, organized by the Hong Kong Monetary Authority. The theme of the event was "Rethinking the Playbook." AI infrastructure was a major focus of the discussions, with Pimco's Emmanuel Roman estimating potential demand at US$10 trillion over the next five years, predicting that demand would become "too much" at some point.

China's ETFs that track major indices of the nation's stock markets, including the CSI 300, SSE 50, and Star 50, saw a sharp increase in net inflows of over 100 billion yuan (US$15 billion) in the first two sessions alone. The total since late September amounted to approximately 556 billion yuan. This influx of capital comes amid Beijing's support for the stock market.

Meanwhile, US stocks faced a historic sell-off following the midterm elections. The Dow Jones Industrial Average fell 3.44 percent, the Nasdaq Composite dropped 5.52 percent, and the S&P 500 declined 4.35 percent – its worst day since April 2025. The Nasdaq 100 alone lost 6.4 percent, or US$2.3 trillion in market value. Memory stocks, such as SanDisk, Micron Technology, and Western Digital, experienced significant losses, with SanDisk plummeting more than 22 percent and the other two companies shedding over 17 percent each.

Foreign holdings of A-shares under the Qualified Foreign Institutional Investor program surged 80 percent from a year earlier, reaching more than 270 billion yuan (US$40.5 billion) by the end of September. This indicates a clear return of global money to the Chinese market, which remains 11.6 percent below its 2025 close. Furthermore, Hong Kong's economy grew 5.2 percent in the third quarter, marking the 15th consecutive quarter of expansion.

This growth was driven by AI-related electronics exports and steady consumption, despite a cooling housing market. September's goods exports rose 64.9 percent, the fastest monthly gain in more than four decades, and retail sales increased for a 17th consecutive month.