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Hong Kong stocks tumble as city hit by protests

World | 2019-06-12 10:48:09
Hong Kong stocks tumble as city hit by protests
Stocks sank in Hong Kong as the city was hit by huge protests that saw tens of thousands of people block key roads, businesses shut up shop and unions encourage members to miss work.

In scenes that revived memories of the 2014 Occupy movement, traffic was brought to a standstill and government offices blocked as crowds demonstrated against a government plan to allow extraditions to China, which was due to be debated Wednesday.

Campaigners have warned that the law would entangle people in the mainland's opaque courts and hammer Hong Kong's reputation as an international business hub. The protests led authorities to delay the reading of bill to "a later date".

The Hang Seng Index fell 1.59 percent, or 440.82 points, to 27,348.52, making it the worst performer in Asia on Tuesday.

"Uncertainty on local policies will confuse investors and affect the flows in and out of Hong Kong stocks," said Ronald Wan, chief executive of Partners Capital International Ltd. "Investors now need to ponder whether or not to pull out of the market given the local events and global factors including the trade war."

Banks listed on the HSI took a hit, with some announcing the closure of branches near the protest areas. HSBC shed more than one percent, while Standard Chartered, Hang Seng Bank and Bank of China Hong Kong were around two percent lower.

Among other firms, market heavyweight Tencent sank 2.2 percent, while AAC Technologies shed 4.70 percent and New World Development dived 3.93 percent.

The retreat on the HSI was exacerbated by profit-taking after a two-day rally that saw it pile on more than three percent, while investors are also on edge as they track developments in the China-US trade row.

Bloomberg
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