HONG KONG (Nikkei Markets) -- Hong Kong shares headed for their lowest level in nearly a month on Wednesday, as unrest in the city and disruptions to local transport showed no signs of abating.
The Hang Seng Index slid 1.8% to 26,587.81 by noon, heading for its lowest close since Oct 16. Local property developers extended losses, with Swire Pacific declining 3.3% and New World Development shedding 5.1%. Local rail operator MTR fell 2.6% as protesters disrupted services for a third consecutive day.
Internet services company Tencent Holdings, the most valuable company listed in Hong Kong, edged 0.3% lower ahead of its third-quarter earnings announcement later Wednesday.
Violent anti-government protests that picked up pace over the weekend have spilled into the week as activists continue to disrupt local transport and clash with the police. Tensions were already high following the death of a teenage protester last week, and have flared further after the police on Monday shot and injured another demonstrator.
The local situation is "worsening remarkably," said Steven Tam, associate director at Fulbright Financial Group. He recommends avoiding exposure to local property stocks, and retail-and-travel-related companies as protests enter their sixth month.
Still, "turnover over the last two days is small, reflecting limited selling pressure," he said. "I would say we need to wait and see."
Turnover on the Hong Kong Stock Exchange's main board was at 43.55 billion Hong Kong dollars ($5.56 billion) by the midday break. Bourse operator Hong Kong Exchanges & Clearing slipped 1.8%.
Tam added that Tencent's results may further weigh on the Hang Seng Index on Thursday, as the company contends with policy changes in China.
Markets in the rest of Asia were also lower, with the Nikkei Asia300 Index shedding 1%. Fresh concerns over the fate of a Sino-American trade deal weighed on sentiment after U.S. President Donald Trump's speech at the Economic Club of New York offered no new details on the talks. He said negotiators were "close" to a phase one deal, but warned that Washington would "substantially" raise tariffs on Chinese goods if Beijing does not make a deal.
Global risk appetite was bolstered last week after China said the two nations were considering rolling back tariffs imposed on goods imported from each other. Investors are awaiting clarity on when Trump and Chinese President Xi Jinping will sign a preliminary deal. An Asia-Pacific Economic Cooperation summit in Santiago where the two leaders were expected to meet, was canceled amid unrest in Chile.
In the mainland, the Shanghai Composite Index declined 0.2%, while the yuan traded onshore shed 0.2% to 7.0207 against the dollar.
Hua Hong Semiconductor dropped 4% in Hong Kong after reporting a 6.4% decline in third-quarter net profit. Semiconductor Manufacturing International advanced 6.4% after the contract chipmaker said its net profit for the third quarter more than quadrupled from a year ago.