Meanwhile, the Education Bureau announced that all schools including kindergarten, primary and secondary as well as special schools will suspend lessons on Thursday out of safety concerns. At least 80 mainland Chinese students were evacuated by police from the Chinese University of Hong Kong by bus.

Concerns about the strength of China’s key October economic due tomorrow and the prospects of a trade deal between the US and the Asian nation also weighed on sentiment.

Industrial product growth probably decelerated from a month earlier, according to the estimates in a Bloomberg survey. US President Donald Trump said in New York his administration will raise tariffs on China significantly should the first phase of a trade agreement not be struck.

China’s Shanghai Composite Index slipped 0.3 per cent to 2,905.24, with insurance companies and brokerages pacing the decline.

“The uncertainty in Hong Kong is making investors uneasy as there is no clear end to the situation,” said Gerry Alfonso, director of the international business department at Shenwan Hongyuan Group in Shanghai. “In this environment, making a long-term asset allocation plan is rather difficult and hence you see people moving into cash.”

The volatility index of the 30-day implied movements on the Hang Seng Index rose to a one-month high, while Hong Kong stocks traded at the biggest discount to mainland shares in almost two weeks, according to a measure tracking the price discrepancy of the two markets.

“Investors are very concerned about the Hong Kong economy,” Kenny Wen, wealth management strategist at Everbright Sun Hung Kai in Hong Kong, said. “It is difficult to forecast coming developments. I strongly recommend investors to reduce exposure on those sectors that are highly correlated with the Hong Kong economy.”

All the 50 members but one on the Hang Seng Index dropped on Thursday, with property developers and banks being among the biggest decliners.

New World Development, whose portfolio includes retail, and hotels and serviced flats, slid 4.9 per cent to HK$10.46 as the worst performer on the benchmark gauge. Wharf Real Estate Investment, which owns Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, dropped 3.7 per cent to HK$42.25.

HSBC retreated 1.4 per cent to HK$58.25 and Bank of Communications lost 1.7 per cent to HK$5.27.

Tencent Holdings, China’s social media giant, slipped 0.9 per cent to HK$327.40 before the release of its third-quarter earnings.

In the mainland, Shanghai Fengyuzhu Culture and Technology tumbled by the 10 per cent daily limit to 14.81 yuan after the company said chairman and general manager Li Hui was detained Tuesday by the Beijing police for suspected collusion in tendering.

Additional reporting by Deb Price