Hong Kong’s Hang Seng Index finished its worst week in two months, weighed down by worries about ongoing protests, uncertainties about global interest rates and frenzied trading on China’s new technology board that sapped interest in stocks listed elsewhere. The Hang Seng Index lost 1.3 per cent, or 367.66 points, over the week, closing at 28,397.74 on Friday. That was its worst weekly performance since May 31. The benchmark dropped 0.7 per cent on Friday, snapping a three-session rally. Turnover on the Hong Kong market failed to breach HK$70 billion (US$9 billion) for the ninth straight session, as investors took a cautious stance ahead of US-China trade talks in Shanghai and the Federal Reserve’s interest rate decision next week. The average daily turnover was $82 billion in June. In China, the Shanghai Composite Index rose 0.2 per cent to 2,944.54, while the Shenzhen Component Index was little changed at 9,349. “The next 60 days will be critical” to Hong Kong’s future as the city faces “an unprecedented political crisis”, Daiwa Capital Markets’ chief economist Kevin Lai wrote in a report. China’s duck farmers are cashing in as African swine fever outbreak puts Chinese consumers off the nation’s favourite meat The Hong Kong government will be pressured to solve the crisis before October 1, the 70th anniversary of China’s founding, Lai said. The protests have dragged on for seven weeks and broadened to larger social and political issues from a controversial extradition bill. In Daiwa’s worst-case scenario, the government will adopt a more forceful approach against protesters, which will be “highly negative for Hong Kong’s economy and its [international financial centre] status”. “Investors are hesitant to go into the market now because of the chaotic situation in Hong Kong,” said Sam Chi-yung, a strategist at brokerage Springwaters Financial Securities, adding that they are also waiting for the Fed’s announcement of interest rate changes next week. Fewer wealthy Asians are upbeat about the world’s economic outlook, as US-China trade war drags on and weighs on sentiment Meanwhile, the European Central Bank’s decision to leave interest rates unchanged, while emphasising officials are looking into a range of stimulus options, has left investors re-evaluating the global interest rate outlook for the rest of this year. Trading on the new STAR board in Shanghai calmed down from a frenzy on Monday, which sucked out capital from main boards in China and Hong Kong. Stocks listed on the new STAR board in Shanghai finished the week 140 per cent higher than their offering prices on average, despite falling broadly on Friday. Semiconductor manufacturer Anji Microelectronics Technology fell 12.2 per cent at 176.25 yuan on Friday, but it was still 350 per cent higher than its offering price of 39.19 yuan. That made it the top performer among the 25 stocks that were the first to be offered on the new board on Monday. Turnover on the board was 19.6 billion yuan (US$2.8 billion) Friday, boosting the total for the week to 142 billion yuan. For the first week stocks trade on the STAR board, they are being allowed to move freely. On Monday, two new stocks will be listed on the board. Investors need to buckle their seat belts for what is expected to be a very bumpy ride in Chinese earnings season Also on Monday, this week's batch of 25 STAR stocks will be allowed to trade no more than 20 per cent up or down in a day. That is more than on other Chinese markets, where stocks can trade up or down by a maximum of 10 per cent. The highly anticipated STAR stocks are not currently available to traders through the Stock Connect programme, but some STAR stocks are expected to be offered to northbound traders later. Pharmaceuticals led the decline in the Hong Kong market on Friday, with CSPC Pharmaceutical Group dropping by 2 per cent to HK$13.88. The stock has gained over 21 per cent since a recent low on June 14, as investors expect China’s tough drug procurement program to become more favourable to drugmakers in terms of profits. Weimob, a provider of marketing and cloud services for businesses on social media platforms such as WeChat, tumbled by 12.5 per cent to HK$4.55 after announcing plans for a share placement and stake cut by three shareholders.