HK-based banks plummeted in early trading. As of press time, stanchart (02888) fell by 6.75% to HKD 67.65; HSBC holdings (00005) fell by 4.18% to HKD 63; Hang Seng Bank (00011) fell by 2.37% to HKD 88.6; Bank of E Asia (00023) fell by 2.17% to HKD 9.46.

On the news front, the US added only 0.114 million jobs in July, lower than expected, and the data for the previous two months was also revised down. Unexpectedly, the unemployment rate rose for the fourth consecutive month, reaching 4.3%, the highest level in nearly three years. The weak employment data has raised concerns about a US economic downturn. JPMorgan and Citigroup expect the Fed to launch aggressive easing by cutting rates by 50 basis points in September and November, respectively, and then by another 25 basis points in December.

Liao Zhiming, Chief Analyst of China Merchants Securities Banking Industry, pointed out that the market behavior of the stock price of foreign banks falling reflects investors' concerns about the future profitability of banks, especially since the net interest margin of banks is shrinking with multiple major economies around the world entering an interest rate-cutting cycle, further increasing concerns about the decline of bank profitability. In addition, HSBC Holdings also mentioned the impact of interest rate cuts on bank operations in its semi-annual report.