June 13, 2019: Asian markets fell again Thursday with Hong Kong suffering a second straight day of heavy losses as investors fret over the impact of protests in the city and plans to introduce a controversial law allowing extradition to China.
Equities were once more deep in negative territory owing to uncertainty over the China-US trade saga and following a tepid inflation report out of Washington, while oil prices were wallowing at five-month lows on supply and demand fears.
Hong Kong's Hang Seng Index led losses after Wednesday's demonstrations against the planned extradition law, which many fear will entangle people in China's courts and hammer the city's reputation as an international business hub.
While the protests have subsided for now the market was down 1.6 percent in the morning, extending the previous day's 1.7 percent loss.
And with Beijing backing the law, observers warned the issue could have a detrimental effect on the mainland.
“Beijing's push for this extradition bill could prove costly as investors and businesses value Hong Kong's autonomy,” said OANDA senior market analyst Edward Moya.
“Uncertainty with Hong Kong's autonomy will dampen business prospects and put a further strain on Chinese growth. If the US and Europe become involved it could complicate relations and future trade deals.”
Hong Kong has also come under pressure from the international community, with the European Union saying the proposed law had “potentially far-reaching consequences for Hong Kong and its people, for EU and foreign citizens, as well as for business confidence in Hong Kong”.