Stock markets and political crisis in Hong Kong

On November 11, the stock markets declined due to the problems connected with the political crisis.

Demonstrations started a long time ago. However, several incidents that happened on Monday increased the level of violence. On Monday, a traffic officer shot a young protester. According to hospital authorities, this protester is in critical condition.

The same day another brutal incident highlighted the risks connected to security. A group of protesters used a flammable liquid to set a man on fire.

All of the factors combined affected the market sentiment, as the ongoing political crisis is a serious challenge for the stock markets. Investors will try to find the countries which are safer such as Japan.

Another problem for Hong Kong is that its economy is slowing down. According to the results from the third quarter of 2019, Hong Kong’s economy is in recession. The economy decreased by 3.2%. For instance, 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.

Asian stock markets

On Monday, stocks in Hong Kong suffered their worst day in more than three months. The Hang Seng Index fell by more than 2.6%. It was the worst single-day decline since the beginning of August.

Let’s have a look at how the real estate stocks performed on Monday. Several famous companies such as Swire Pacific, Wharf Real Estate, Sun Hung had a bad day. Real estate stocks decreased by more than 4%.

 China’s Shanghai Composite decreased by 1.8%. Meanwhile, South Korea’s Kospi index decreased by 0.6%. Japan’s Nikkei 225 dropped 0.3%.  

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Hong Kong is one of the most important financial hubs in the world. Protracted political crisis may undermine its role as uncertainty is harmful to the stock markets.