The US stock market plummeted and spread rapidly around the world. On October 19, the London Financial Times index in the UK fell 183.70 points, a drop of 10.8%, setting the largest daily decline in the UK stock market; Japan's Tokyo Nikkei index fell 620 points on October 19, and 20 fl fell another 3,800 points, with a cumulative decline of 16.90%; on October 19 or 20, the stock markets in France, the Netherlands, Belgium and Singapore fell 9.7%, 11.8%, 10.5% and 12.5% ​​respectively, and Brazil and Mexico stock markets plummeted by more than 20%...

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In Hong Kong, although it fell by 45.44 on the previous trading day, at the close, the futures index was still high at 107.1 (spot month), and the premium for the forward month was more than 200 points higher. In newspapers, securities industry personnel quoted the views of securities industry personnel, most of them continued to be optimistic about the future market, believing that the market was stable and could rebound next week. Only a small number believed that they were only affected by the US interest rate hike, and the adjustment trend may continue, but no one seemed to dare to be indifferent to the future market. Note: There is a keyword here - "dare"!

Let me explain again here that stock index futures have a premium. For example, if the premium is 100 points but actually falls by 200 points, then if you short sell, you actually make 300 points. By the same token, if you have a premium of 100 points, you actually rise by 80 points, even if you buy too much, you still lose 20 points. It is as the saying goes - you can see the market and lose money!

Therefore, it is not that easy to do futures. If you know the bull market, can you make money by buying too much? If you know the bear market, can you guarantee to make money? In fact, it is not certain. Otherwise, you can laugh to death in your dreams, and all the investors in this world can become millionaires. By the way, is this possible?

On Monday, October 19, the sky was clear and everything seemed to be as usual, and factories and shops started as usual. Due to the time difference, the Hong Kong stock market opened before New York, so it was unprepared for everything that was about to happen.

At 10 o'clock, the United Exchange had just opened the market, and a strong wave of selling suddenly appeared. All blue-chip stocks opened several prices, and then the selling market appeared like a rush. The decline of second- and third-tier shares became even more fierce. Many stocks had only sellers and no buyers. At 10:15 (15 minutes after the opening), the Hang Seng Index had fallen by 120 points, and then the market was calm and the selling market was slightly restrained. However, by 11 o'clock, another round of selling frenzy emerged again. Until the closing at 12:00, the index fell by about 140 points to 3524.64.

When the afternoon market opened, the selling orders were even more overwhelming. Many stocks and even blue-chip stocks were only sellers, and the buyer's cards were empty. The investors had no way to sell and cried. The market investment sentiment changed from absolute optimism to extremely pessimistic within this day. The futures index market closed twice. Although the stock market was devastated, the futures index market became even more vulnerable. Since the futures index market had a suspension system, when the market fell by more than 150 points in the morning, the futures exchange suspended the board according to regulations. After the market resumed in the afternoon, the futures index bid price jumped sharply. When it approached three points, spot and November futures fell by 180 points and 150 points, and the market closed for the second time.

Later, Hong Kong TVB’s famous drama "The Great Era" included a wonderful interpretation of this stock market crash.

That night, Hong Kong investors almost couldn't sleep at night. On the one hand, they looked at the quotes of London Hong Kong stocks, and on the other hand, they were waiting for the opening of the US stock market. However, the disaster did not happen. On Black Monday, Wall Street broke out, and many Hong Kong investors were at a loss, except for a cheering stock broker brother and sister partner.

The next morning, the Hong Kong Stock Exchange held an emergency meeting and finally made a decision when the market opened at 10 o'clock, announcing that the Stock Exchange was suspended for four days in order to keep investors calm and to keep a large amount of uncleaned settlements!

This decision is quite shocking, but I believe that many Hong Kong investors praised it at that time, thinking that this was a wise and rational move, which temporarily stopped the vicious cycle. In fact, the Hong Kong investors at this time were similar to those of Baodao investors and later mainland investors. They were all "broken chickens" and had no sense of risk at all. Many investors even leveraged and overdrawn, thinking of getting rich overnight. Therefore, the sudden big drop caused quite a lot of people to go bankrupt. Since it can now "delay the execution of the four-day death penalty", it is good if you say it.

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However, a strange scene happened. The sight returned to the United States. Before the opening of the market on the 20th, there was still a pessimistic atmosphere. Investment banks such as Goldman Sachs and Solomon Brothers also jointly applied for the suspension of the market. So New York Stock Exchange Chairman Philan also spoke on behalf of them with the then Secretary of Treasury James Baker to discuss with him whether to ask the president to come forward to announce an emergency closing. Treasury Secretary James Baker rejected Philanthropy and personally went on TV to help the audience understand how the fundamentals of the US national economy are healthy, saying that President Reagan's economic policies will continue to be the same, and called on the stock market to restore confidence.

However, by noon, a large number of buying appeared and the stock market gradually stabilized.

However, Hong Kong stock investors still didn't notice this strange thing. Especially on that day, stock markets around the world plummeted sharply, Japan's Nikkei average index fell sharply by 3836 points, London Financial Times index dropped by 250 points, and Australian stock market fell by 510 points. Hong Kong stock investors are still glad that this market closure can help them escape the disaster.

Unexpectedly, Wall Street stock market rebounded sharply by 160 points on Wednesday, so some people began to ask questions: Is the market suspension too long for four days? Is it harmful to Hong Kong's reputation as a financial center? Even legal professionals attracted attention and pointed out that the suspension of the Stock Exchange was illegal.

Chairman of the Stock Exchange, Li Fuzhao, began to face pressure from the public opinion community, but he still insisted on resuming market trading next Monday, and believed that if the U.S. stock market hastily resumed due to the rebound of US stocks, will the U.S. market be closed again? He also believed that if the U.S. stock market had not been wisely decided to suspend the market on Tuesday, the stock market would have been "possessed everywhere".

As for the Hong Kong government, it also made remarks supporting the practice of the Stock Exchange. The Hong Kong government believes that this decision is in full compliance with the interests of socialites and investors. In fact, in the past four days of the market suspension, in addition to clearing the settlement of stock market backlog, keeping investors calm and causing social debate, the most serious thing is that the futures index market is facing a crisis of collapse.

Although all parties have taken response measures before the market resumed, in addition to experts saying that Hong Kong's economy is performing well and the stock market should not fall again, the Banking Association also lowered the best interest rate by one to seven and a half, hoping to stabilize the market.

A week passed quickly, and after a rare four-day closing, the Hong Kong stock market opened again.
Chapter completed!