Hong Kong stocks plunge as trade war escalates and protests compound growth concerns
- Hang Seng had plunged over 3 per cent early in the day, but narrowed its losses at the close
- Declines in China indexes came as the onshore yuan slipped to an 11-year low
The Hang Seng Index closed 1.9 per cent lower, weighed down by a ramp-up in the US-China trade war and weekend demonstrations in which Hong Kong police for the first time used water cannons to try to disperse protesters.
The drops in China were milder. The CSI 300 index, which tracks stocks listed in both Shanghai and Shenzhen, fell 1.4 per cent on Monday, to 3,765.91. The declines came amid a weakening Chinese currency, which saw the onshore yuan drop to an 11-year low of 7.15 per dollar in early trade.
The losses in the Hang Seng Index, which closed at 25,680.33, had narrowed at the close, after the benchmark gauge plunged by over 3 per cent within minutes of the market opening. The declines were seen almost across the board.
“There are a lot of uncertainties that are weighing on the Hong Kong market,” said Linus Yip, chief strategist at First Shanghai Securities.
The weakening Hong Kong economy, damaged by increasingly violent protests that started in June, means listed companies whose business is primarily focused on the city will continue to face pressure, he added.
Link Reit, which invests in Hong Kong-based retail properties, fell 2.4 per cent to HK$89.8. New World Development, a major Hong Kong developer, dropped 3 per cent to HK$9.84.
