Hong Kong stocks tumbled Tuesday as protests that have jolted the city for more than two months fuel political and economic uncertainty, with China’s growing frustration leading to worries it will take a tougher line with the standoff.
The increasingly violent unrest in the key financial hub comes as world markets are hit by fears about the global economy and dimming hopes for trade talks between China and the United States.
In the latest development, Hong Kong’s busy international airport was forced to cancel hundreds of flights in and out on Monday as thousands of demonstrators descended, stranding thousands of passengers.
Hundreds of flights were still listed as cancelled at the airport, one of the world’s busiest, and protesters called for a new gathering there later in the day.
The abrupt closure came 10 weeks into a crisis that has seen millions of people take to Hong Kong’s streets in the biggest challenge to Chinese rule of the semi-autonomous city since its 1997 handover from Britain.
Hong Kong’s Beijing-backed leader Carrie Lam has ruled out making concessions and on Tuesday she warned that violence would push the city down a “path of no return”.
That came a day after China described violent protests as “terrorism”, which analysts said raised concerns among investors.
Stephen Innes, managing partner at VM Markets, said: “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.”
The Hang Seng Index was down 1.86 percent, or 479.07 points, at 25,345.65 by the break.