Hong Kong stocks ended the week as the world's worst-performing major equity market after concerns heightened that the political unrest has already taken a heavy toll on the city's economy.
The Hang Seng Index dropped 3.4 per cent for the week, delivering the steepest decline among the world's major benchmarks. It slipped 0.1 per cent to 26,435.67 on Friday.
The protests, which started in June because of Hongkongers' opposition to the now shelved extradition bill, have already weighed on retail sales by scaring away tourists and forcing shop closures. Local retailers including Sa Sa International Holdings and Esprit Holdings this week issued warnings that the tumult was hurting their businesses.
China's Shanghai Composite Index rose 0.2 per cent to 3,006.45 on Friday after banks cut the one-year loan prime rate by five basis points and a development plan boosted infrastructure stocks.
"It's a hangover that will linger on the Hong Kong market until the issue is really resolved," said Wang Zheng, chief investment officer at Jingxi Investment Management, in Shanghai. "Before that, it's what will mainly hold back stocks."
Among the week's biggest decliners were Geely Automobile Holdings, Shenzhou International Group Holdings and Techtronic Industries, which retreated at least 7.2 per cent in the period.
MTR, the operator of the city's railways, added 0.3 per cent to HK$45.95 after new chairman Rex Auyeung Pak-kuen told the South China Morning Post that he was not bowing to pressure from Beijing.
At least US$5 billion of funds made their way into mainland-traded stocks before market close to reflect weighting changes by FTSE Russell and S&P Dow Jones Indices, according to UBS Group.
FTSE Russell will triple the representation of Chinese stocks in the benchmarks, while S&P will add the stocks to its global gauges for the first time, with all the rebalance effective after the market close.
Overseas traders bought 14.9 billion yuan (US$2.1 billion) of Chinese stocks via the exchange links on Friday, the most since November 2, according to Bloomberg data.
Jinxi Axle, Xinjiang Communications Construction Group and other infrastructure companies surged on a sweeping plan to develop the transport system across the country in mainland trading.
Jinxi Axle jumped by the 10 per cent daily limit to 4.80 yuan and Xinjiang Communications also soared by that much to 28.29 yuan. China High-Speed Railway Technology rallied 10 per cent to 3.96 yuan.
The development plan, which was released by the State Council, China's cabinet, after the market closed on Thursday, outlines a blueprint for building a comprehensive transport network and developing more sophisticated means of public transport.
Liquor giant Kweichow Moutai rose 1.1 per cent to 1,157.42 yuan, closing at a record for a second time this week. Price targets set by global investment banks imply the stock's run-up still has legs. Morgan Stanley has a share price estimate of 1,350 yuan, while Goldman Sachs expects it to rise to 1,349 yuan.
Inspur Electronic Information Industry surged by the 10 per cent daily cap to 28.44 yuan after The Paper reported that rival Huawei Technologies will pull out of the server market in due time.
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