Hong Kong Markets Close Early as Tropical Storm Wipha Rages

(Bloomberg) -- A tropical storm shut Hong Kong’s financial markets for the first time in almost two years, adding extra drama to a city that’s been wracked by protests for weeks.

The Hong Kong Observatory raised the storm signal to 8 at 1:40 p.m. local time, the third highest number on its scale. That prompted the city’s stock exchange to suspend trading 15 minutes later, as required by its rules. The Hang Seng Index, which normally closes after 4 p.m., ended the session 1.3% lower. Nearly 600 flights have been cancelled or delayed.

Tropical storm Wipha was centered about 320 kilometers (199 miles) south-southwest of Hong Kong at 7 p.m. local time, and forecast to move toward the vicinity of western Guangdong province, according to the observatory. Wipha is now at its closest to the city, meaning storm signal 8 is expected to remain in force for most of the evening, it said.

“There’s a lot happening this week that’s keeping investors on the sidelines and adding to their cautious sentiment,” said Linus Yip, a strategist with First Shanghai Securities Ltd. “Local stocks are under pressure amid uncertainties in Hong Kong, and their performance is the main drag on the market. No one dares to bottom fish stocks right now.”

As of 8 p.m. local time, 16 people had sought treatment at public hospitals, the government said, adding that it had received 10 reports of fallen trees and one each of landslides and flooding. The city’s airport authority said 25 flights had been cancelled and another 562 delayed. People rushed to get on trains before the suspension of bus and ferry services, while roads were jammed with traffic as workers sought to get home early.

Train services continue and trains on the Island line, which cuts through the city’s financial center, are running at four-minute intervals, MTR Corp. said. The Hong Kong-Macau ferry terminal in Sheung Wan was temporarily closed. Most stores in Hong Kong’s central district shut by early afternoon, with many employees seen taping their windows.

Preliminary data Wednesday showed the city’s economic expanded just 0.6% in the second quarter from a year earlier, less than half the pace forecast by economists. Hong Kong Chief Executive Carrie Lam had said earlier this week there’s “no room for optimism for the second quarter and the entire year,” according to a government statement citing her remarks at a luncheon.

Casinos remained open in Macau, with representatives for Wynn Macau Ltd. and Galaxy Entertainment Group Ltd. saying operations are normal. Last September, resorts were hurt after Typhoon Mangkhut ripped through the world’s biggest gaming hub, forcing a temporary shutdown of casinos for the first time since licenses were given out in 2002.

Wednesday’s weather disruption comes at a particularly bad time for Hong Kong. Eight consecutive weekends of unrest in the city have driven away tourists and forced retailers to close some stores in the city’s busiest areas, hitting sales of jewelry and cosmetics. It has also affected landlords’ ability to raise rents.

“Lots of stocks, especially heavyweights, are being sold off, including developers and consumer-related stocks,” said Castor Pang, head of research at Core Pacific-Yamaichi International in Hong Kong. “That’s a signal that many long funds are pulling out of the market.”

The stock declines reflect growing frustration over Hong Kong’s political impasse. Investors on Monday sold the city’s shares at the fastest rate in more than six weeks, after protesters clashed with police for an eighth weekend. Traders are worried the violence will disrupt the local economy, and a rare press briefing by Beijing did little to ease their concerns.

The MSCI Hong Kong Index fell for a sixth day on Wednesday, the longest losing streak in more than a year. It’s fallen 3% this month as protests intensified.

--With assistance from Magdalene Fung, Alfred Liu, Jeanny Yu, Jinshan Hong, Dominic Lau, Amanda Wang and Denise Wee.

To contact the reporters on this story: Fion Li in Hong Kong at fli59@bloomberg.net;Sofia Horta e Costa in Hong Kong at shortaecosta@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Will Davies, Karen Leigh

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