Hong Kong shares declined Monday as businesses faced major disruptions amid a general strike aimed at bringing the city to a standstill.
The benchmark Hang Seng index dropped 2.85% to close at 26,151.32.
Carrie Lam, Hong Kong’s embattled chief executive, said Monday that she believed the city was on the verge of “a very dangerous situation. ” The unrest in Hong Kong started since early June when protesters took to the streets to oppose an extradition bill proposal — which has since been suspended, but not fully withdrawn.
Monday’s strike followed another weekend of violent protests, according to Reuters. More than 100 flights had already been cancelled while rail operator MTR Corp announced the suspension of services between parts of Hong Kong as commuters struggled to get to work, the news wire reported.
Shares of Cathay Pacific, Hong Kong’s main airline, were down 4.24%.
Most Asian markets lower
Other Asian markets also traded lower amid wider concerns over the trade dispute between Beijing and Washington.
President Donald Trump said Thursday that the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.
“We expect the policy response in China to be calibrated to the impact of the tariffs, being mindful also of the risks to financial stability,” analysts at J.P. Morgan wrote in a note. “We expect that China will step up fiscal and monetary policy support but in a manner that avoids financial imbalances.”
In Japan, the Nikkei 225 fell 1.74% to close at 20,720.29, adding to its losses from Friday where it had declined more than 2%. Shares of index heavyweight SoftBank Group dropped 3.48%. The Topix index shed 1.8% to finish its trading day at 1,505.88.
South Korea’s Kospi fell 2.56% to close at 1,946.98, as major technology and manufacturing names in the country sold off. Shares of Samsung declined 2.22%, SK Hynix was down 0.92%, steelmaker Posco fell 3.23% and Hyundai Steel dropped 3.84%.
On Monday, Seoul announced plans to invest about 7.8 trillion Korean won($6.48 billion) in research and development to foster local production of materials and equipment over the next seven years, Reuters reported. That, according to the news wire, is aimed at cutting down South Korea’s reliance on Japanese imports, after Tokyo last week removed the country from its so-called “white list” of trading partners that enjoy fast-track export status.
In mainland China, the Shanghai composite slipped 1.62% to close at about 2,821.50 and the Shenzhen component shed 1.66% to end its trading day at 8,984.73. The Shenzhen composite declined 1.467% to close at around 1,517.27.
Those moves came after the Caixin services Purchasing Managers’ Index (PMI) for July came in at a 5-month low, at 51.6 against June’s reading of 52.0. A PMI reading of 50 separates growth from contraction.
Over in Australia, the S&P/ASX 200 shed 1.9% to close at 6,640.30.
Overall, the broader MSCI Asia ex-Japan index dropped 2.52%, as of 4:25 p.m. HK/SIN.
Chinese yuan breaks 7 against dollar
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.903 after seeing levels above 98.7 last week.
The Japanese yen was trading at 105.92 against the dollar after strengthening from levels above 108.8 in the previous trading week. Elsewhere, the Australian dollar changed hands at $0.6758 after declining from highs above $0.688 last week.
Oil prices declined Monday afternoon during Asian trading hours, with the international benchmark Brent crude futures contract slipping 1.52% to $60.95 per barrel. U.S. crude futures also fell 1.56% to $54.79 per barrel.
In company news, HSBC announced the departure of its CEO John Flint on Monday, citing the need for a change at the top amid “a challenging global environment.”
Hong Kong-listed shares of HSBC fell 1.85% on Monday.
The renewed trade jitters between Washington and Beijing last week sent the S&P 500 stateside to its worst weekly drop of 2019, falling 3.1%. The Dow Jones Industrial Average had its second-worst week of the year, declining 2.6%.
Responding to Trump’s latest salvo, China’s foreign ministry said Friday that the country does not want a trade war with the U.S. but is unafraid of fighting one.
U.S.-China trade war developments have roiled global markets for more than a year, and there have been signs the rafts of additional tariffs from both sides are having real effects on economies around the world.