As a rule, equity markets are sensitive to all kinds of political unrest. This time, violent social protests in Hong Kong heavily affected the stock market last weekend. European stock markets suffered as well from the anti-government protests in this region. Moreover, comments from the US officials about their unwillingness to lift import tariffs on Chinese goods brought more pessimism to the markets. The combination of these two negative factors has dragged down financial markets. Analysts recorded a significant decline in trade and retail. Thus, the stocks of mining companies included in the FTSE 100 index have lost from 2% to 3.2%, while Western corporations selling luxury goods in Hong Kong recorded a decrease in the price of shares by less than 1%. Some British companies were affected the most by the political unrest in Hong Kong. Shares of HSBC and Standard Chartered went lower by 2.4% and 2.0% respectively. Burberry incurred the biggest losses among European luxury brands with its shares falling sharply by 2.4%. Earlier, the escalation of the conflict in Hong Kong caused the Hang Seng stock index to drop by 2.6%. Analysts note that this was the steepest one-day decline in three months. Property stocks have also slumped. Experts say that high volatility in this sector could have a negative impact on the secondary listing of Alibaba shares of $10– $15 billion. Escalating tensions in the region may hinder trade negotiations between the US and China, experts warn. The White House considers the situation in Hong Kong to be one of the “pressure points” in the trade dispute.
