On Monday, tensions escalated in Hong Kong. The demonstrations started several months ago in June. On November 11, several incidents took place in Hong Kong. Due to the problems connected with the political crisis Hong Kong stocks declined on Monday.
Early in the day, a traffic officer shot a young protester. As a result of this incident, a 21-old protester is in critical condition. Unfortunately, this was not the only incident as on the same-day group of protesters used a flammable liquid to set a man on fire.
Demonstrators also blocked several subway lines as well as roads. Protests started as a response to extradition law which would give the authorities the right to send citizens of Hong to mainland China. Even though the government of Hong Kong made the decision to withdraw this law, protests are far from being over.
In this situation, it is not surprising that market sentiment declined, and this is a serious challenge for the stock markets. Investors will try to find the countries which are safer such as Japan.
It is worth mentioning, that based on the results from the third quarter of 2019, Hong Kong’s economy is in recession. The economy decreased by 3.2%. For example, in the second quarter, the economy contracted only by 0.5%.
Economists are now predicting that in 2019, Hong Kong won’t be able to meet the target of between 0% to 1% growth.
Unrest in Hong Kong and stocks
As mentioned above, Hong Kong stocks fell on Monday. Stocks in Hong Kong suffered their worst day in more than three months. The Hang Seng Index decreased by more than 2.6%. It is the worst single-day decline since the beginning of August.
The real estate market is one of the sectors which experienced problems connected with Hanh Seng’s index. Several famous companies such as Swire Pacific, Wharf Real Estate, Sun Hung have a bad day. Real estate stocks decreased by more than 4%.
China’s Shanghai Composite fell by 1.8%. Meanwhile, South Korea’s Kospi index decreased by 0.6%. Japan’s Nikkei 225 dropped 0.3%.
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