Hong Kong stocks slide as fears over protests grow. Real estate hardest hit
The political crisis was not the only factor to weigh on the Hang Seng, which fell as much as 1.6% in afternoon trading. Like other Asian markets, uncertainties about US-China trade and other economic policy this week dragged the index lower. But stocks for property developers, shopping mall owners and retailers all sank Monday, indicating that the demonstrations have set the the financial world on edge.”Investors are worrying about the worsening situation of the protests, as it’s already hurting retail sales and property market,” said Ben Kwong, an executive director of Hong Kong brokerage firm KGI Asia.The big protests stretched into an eighth consecutive weekend and prompted a response from the city’s financial secretary, who warned the actions could hamper local business. Demonstrators are calling for greater democracy, an independent investigation into police brutality and the resignation of the city’s leader, Carrie Lam.The biggest loser on the Hang Seng was Wharf Real Estate Investment, which owns major shopping malls in the city. Real estate stocks in Hong Kong have been hurt by China’s economic slowdown. But protests may also have an effect on business: One of Wharf Real Estate’s malls, Times Square, is a major tourist attraction that was close to where some recent protests took place. The stock tumbled 5.3% in the afternoon. New World Development, one of the city’s largest developers, sank 4.1%. Rival Hang Lung Properties dropped 3.5%. MTR, Hong Kong’s sole subway system operator and a real estate owner in its own right, lost 3.9%, its worst day this year. MTR train service has often been disrupted by the protests.Hong Kong investors are still largely watching to see if the situation gets worse, wrote George Yang, an economist at Prime China Securities, in a recent research note. He added that it’s too early to predict a massive capital outflow.China’s top Hong Kong policy official will speak publicly Monday for the first time about the escalating protests. Hong Kong is set to announce second-quarter GDP figures later this week.Asian markets in general traded cautiously lower Monday as investors prepared for the US-China trade talks in Shanghai, as well as the Federal Reserve’s hotly anticipated decision on interest rates.Japan’s Nikkei dropped 0.4%. South Korea’s Kospi (KOSPI) fell 1.8%, and was poised to extend a four-day losing streak. The Shanghai Composite Index (SHCOMP) edged down 0.2%. Taiwan’s Taiex dipped 0.1%.Australia’s S&P/ASX 200, meanwhile, rose 0.6%.Here are some of the other big moves on Asian markets at 2 p.m. Hong Kong time.The trade talks that will kick off Tuesday in Shanghai mark the first time that top negotiators from the United States and China will meet in person since since their leaders declared a temporary truce at the G20 meeting last month. US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will speak with Chinese Vice Premier Liu He and other senior officials.Japanese conglomerate Hitachi fell 3% in Tokyo. It reports earnings later in the day.The Japanese yen strengthened against the US dollar Monday, and was trading at ¥108.6100 per dollar in the afternoon.Oil prices dropped after posting weekly gains last week. WTI crude dropped 0.3% to $56.04 per barrel, and Brent crude fell 0.4% to $63.10 per barrel.