Hong Kong stocks drop most in Asia as protesters block roads

The proposed extradition law has sparked widespread unease in Hong Kong. (AFP pic)

HONG KONG: Stocks fell in Hong Kong as demonstrators threatened to bring the city to a standstill.

The Hang Seng Index lost 1.2% as of 10.13am local time as Asia’s worst-performing gauge. The biggest contributors to losses included Hong Kong Exchanges & Clearing Ltd., which operates the city’s stock exchange, as well as lenders HSBC Holdings Plc and Hang Seng Bank Ltd. Chinese companies listed in the city also fell, with Internet giant Tencent Holdings Ltd. losing 1.7%.

The declines coincided with protests in the city over legislation that, if passed, would allow extraditions to China. Thousands of protesters converged on Hong Kong’s legislature Wednesday, blocking roads in tactics similar to 2014 Occupy demonstrations.

“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.”

The Hang Seng Index was only just recovering from a rout that had made it one of the world’s worst performing major benchmarks in May.

Sunny Optical Technology Group Co. dropped 5.8% and AAC Technologies Holdings Inc. lost 3.6% as the worst performers on the benchmark gauge. Citigroup cut its price target on Sunny, citing risks from US ban on Huawei Technologies Co.

The Hong Kong dollar climbed as much as 0.12% to the strongest versus the greenback since December on increased demand for cash, before paring the gain to 0.07% at HK$7.8309.