Hong Kong Stocks fall on violent confrontations

The Hong Kong share market ended softer in extremely quiet trade on Tuesday, 03 September 2019, as risk aversion selloff triggered amid deepening political crisis threatens to plunge the city into economic recession. Meanwhile, selloff pressure intensified on lingering worries over the trade war between world's two-biggest economies after Chinese and American officials struggle to schedule a planned meeting this month to continue trade talks. At closing bell, the Hang Seng Index declined 0.4%, or 98.70 points, to 25,527.85. The Hang Seng China Enterprises Index was down 0.7%, or 67.58 points, to 10,035.78.

The uncertainty about the US-China trade continues to rule the markets. Markets remain sensitive to the twists and turns on trade with the chances of a resolution between the world's two-biggest economies appearing more out of reach. Damage from the uncertainty is now being reflected in economic data: a slide in China's official purchasing managers' index highlighted pressures facing the world's second-largest economy from escalating tensions.

China on Monday lodged a complaint against the United States at the World Trade Organization, after Washington slapped a 15% tariffs on various Chinese goods the previous day. Beijing hit back with new duties on U.S. crude oil.

Violent confrontations in Hong Kong are also weighing on sentiment. Hong Kong school and university students on Tuesday are due to boycott classes and hold pro-democracy rallies for the second straight day, further fuelling the political crisis in the Chinese-ruled city. Over the weekend, protesters disrupted traffic at the airport and vandalised Tung Chung MTR station. On Saturday, an illegal march on Hong Kong Island descended into pitched battles with riot police who used tear gas and water cannons. After the violence on Sunday, when protesters vandalised MTR stations across the city, the rail operator said services would run as normal today.

The crisis was triggered in June by a now-suspended extradition bill, but has developed into a call for broader democracy in the former British colony amid fears of Beijing's tighter control. The government has warned that the chaos would damage the city's economy.

Blue chips were mostly firmer. HSBC (00005) softened 0.2% to HK$55.95. HKEX (00388) dipped 0.3% to HK$236.8. Tencent (00700) fell 0.6% to HK$329.2. China Mobile (00941) slipped 0.2% to HK$64.75. AIA (01299) inched down 0.2% to HK$75.

Casino operators rebounded after yesterday's slide on the weaker-than-expected gross gaming revenue for August. Sands China (01128) gained 0.9% to HK$35.15. SJM Holdings (00880) jumped 2.1% to HK$7.35. Galaxy Entertainment (00027) added 0.6% to HK$49. Wynn Macau (01128) ascended 0.5% to HK$15.38. Melco International (00200) was unchanged at HK$17.56. But MGM China (02282) shed 0.2% to HK$11.48.

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