A Sunday rally brought out hundreds of thousands of protesters – organisers said 1 million showed up, while the police put the turnout at 240,000 – on to the city’s streets to oppose a proposed extradition bill, in the biggest demonstration since the 1997 handover of Hong Kong by the United Kingdom to China. The proposal would allow suspects to be transferred to jurisdictions with which the city does not have an extradition agreement, including mainland China.

Bill opponents fear that Hongkongers could be at risk because fair trials are not guaranteed in the mainland.

The scene of police officers clashing with protesters carrying umbrellas and wearing goggles brought back memories of the Occupy Movement in 2014, when the Hang Seng Index dropped by 4.2 per cent over the 79 days of protests. Shopping centres, banks, hotels and small businesses suffered then, as foot traffic dwindled amid blocked roads from the normally vibrant downtown area.

“The protest is of course one of the negative factors that are weighing on stocks by adding uncertainty, and it is still brewing up. But concerns about slowing global growth and a slowdown in China’s economy are the main restraint on the market recently,” said Ken Chen Hao, a Shanghai-based strategist at KGI Securities.

Declines in Hong Kong were led by financial services stocks, as HSBC, Standard Chartered and Citic Bank closed half a dozen branches between them in Admiralty, the centre of the protest action, to protect their staff and customers.

Hong Kong Exchanges & Clearing Limited (HKEX), the operator of Asia’s second-largest capital market, postponed a cocktail event to celebrate its 19th anniversary, after the city’s Chief Executive Carrie Lam Cheng Yuet-ngor and the Financial Secretary Paul Chan Mo-po said they would not attend, amid the protests, which the city’s police later classified as a riot.

The information technology stock index fell 5 per cent, although its loss was magnified by index heavyweight Tencent’s 2 per cent drop. Other big losing sectors of the day were health care and real estate, which each fell 2.7 per cent.

Sunny Optical was the biggest loser on the Hang Seng, shedding 6 per cent to HK$69.15, while AAC Technologies Holdings fell 3.4 per cent to HK$42.10. The suppliers react strongly to Apple and trade war news, and came under pressure after the primary manufacturing partner of the maker of iPhones and iPads – Hon Hai Precision Industry better known as Foxconn Technology Group – said it has enough capacity to make all iPhones bound for the US outside China, if necessary.

Apple’s US-bound iPhones can all be made outside China if needed, says contract manufacturer Foxconn

In China, rare earths soared again. JL Mag Rare-Earth, the company visited by President Xi Jinping on May 20, shot up to the 10 per cent daily limit, as speculators continued to pile into what has become one of the flash points in the US-China trade war. Infrastructure-linked stocks continued to do well on signs of government fiscal stimulus.

But all sectors on the Shanghai Composite Index ended down, though all by less than 1 per cent.

Trade uncertainties and concerns about China growth weighed on sentiment.

Consumer prices rose 2.7 per cent from a year earlier in May, the fastest pace since February 2018, the National Bureau of Statistics reported.

Producer prices gained 0.6 per cent, it said. Faster inflation was led by higher pork prices, which rose 18.2 per cent from May 2018, while vegetable prices rose 13.3 per cent.

Additional reporting by Zhang Shidong, Georgina Lee and Daryl Choo