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Nikkei Markets

Hong Kong shares slide as protesters and police clash

Swire Pacific, New World and MTR among major decliners

HONG KONG (Nikkei Markets) -- Hong Kong shares posted their worst performance in three months on Monday, as tensions in the city flared after at least one and possibly two protesters were shot and injured by police during demonstrations.

The Hang Seng Index tumbled 2.6% to 26,926.55, its biggest single-day drop since Aug. 5. Forty-nine of the gauge's 50 constituents ended, with local property developers accounting for four of the top five decliners in percentage terms. Swire Pacific and New World Development slid 5.2% and 4.2%, respectively, while Sun Hung Kai Properties and Wharf Real Estate Investment declined 4.3% and 4.5%.

Hong Kong rail operator MTR declined 3.1%. Services on several train lines were disrupted on Monday due to protests.

Apple-supplier AAC Technologies Holdings slumped 5.4%, extending Friday's 0.5% drop after reporting a 28.6% slide in third-quarter net profit. Sunny Optical Technology Group fell 3.4%. The smartphone components supplier on Friday reported a 42% jump in October shipment volume for handset lens sets.

Political unrest in Hong Kong intensified over the weekend and on Monday following the death of a student last week who was injured during a recent clash between police and protesters. Two protesters were shot by the police on Hong Kong island on Monday, according to media reports, as activists disrupted public transport amid calls for a strike. A government statement confirmed that one male was shot by the police on Monday.

Anti-government protests in Hong Kong, which started peacefully in June, have frequently turned violent as the police and activists have clashed repeatedly. The demonstrations usually take place on weekends or public holidays, or after work hours on weekdays. Police on Monday fired tear gas in the Central business district as protesters blocked streets during lunch hour.

"People thought the situation could cool down once protests are prolonged. But we are entering a new chapter, possibly with the loss of human lives. This will become more problematic," said Thomas Fung, chief investment officer at China Rise Securities Asset Management. "Today's drop for the Hang Seng Index was a bit too much. Chances for another deep dive tomorrow are not high."

"If district council elections are canceled, people may start to worry about international capital leaving the city," he added. District council elections in the city are due to take place on Nov. 24.

In the mainland, the Shanghai Composite Index fell 1.8%. Markets in the rest of Asia also traded lower, with the Nikkei Asia300 Index slipping 1.8%.

Yuexiu Property declined 2.8% in Hong Kong following a 45% drop in October contracted sales.

ITC Properties Group slumped 12.9% after saying it expects to report a "significant" net loss for the six months ended Sept. 30, compared with a profit in the year ago period. Poly Property Group slipped 3% after reporting a 3.6% decline in contracted sales for the January-to-October period.

Mobi Development jumped 5.5% after the company said its accumulated sales revenue from 5G products during the January-to-September period surged 186% from a year ago.

--Benny Kung

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