Update | Stocks suffer as street protests persist

Hong Kong's premium to Shanghai stocks was wiped out yesterday as political risk from pro-democracy Occupy Central protests soured sentiment on the city's share market and saw it end September with its weakest performance in 28 months.

A second successive day of selling shaved 1.28 per cent off the benchmark Hang Seng Index, taking its loss for the month to 7 per cent and breaking a key technical support at 23,000 points in the process as the blue-chip index settled at 22,932.98.

"The popular stock market belief that September is the worst month for investing is ringing true this time, especially in the case of the Hang Seng Index," said Ryan Huang, a market strategist at broker IG in Singapore.

"We're likely to see the downward momentum for Hong Kong shares continue with technicals and fundamentals looking rather bearish," Huang wrote in a note to clients in which he called the bottom of the current decline at 22,400 points.

The fall came as Hong Kong entered a two-day public holiday, with investors braced for more downside when the market reopens on Friday if anti-government protesters still throng the streets in their thousands as they have since the weekend.

The Hang Seng's volatility index rose 50.45 per cent last month, the biggest monthly increase since September 2011.