Hong Kong — Apprehension over capital outflows triggered by escalating political unrest has driven Hong Kong’s stock market to its lowest this year and pressured its currency, with analysts warning of more weakness.
Now into their third month, those protests ground Hong Kong’s airport to a halt this week and forced flight cancellations even as both protester and police tactics turned increasingly violent. Other risk indicators in markets are flashing red. The Hong Kong dollar, pegged to the greenback at 7.75-7.85, was trading at 7.8465.
Hong Kong leader Carrie Lam pleaded on Tuesday for a stop to the protests, having warned of an economic “tsunami” engulfing the city last week.“Dropping the ‘T’ word is particularly disturbing as it does suggest a more aggressive mainland response, which triggered a wave of risk aversion across global markets,” said Stephen Innes, managing partner at VM Markets in Singapore, referring to Beijing’s response.