Escalating violence in Hong Kong could hit global market hard

Analysts fear a violent crackdown would shake the global market

The global market might shake if Beijing cracks down on HK's protest (CNA photo)

The global market might shake if Beijing cracks down on HK's protest (CNA photo)

TAIPEI (Taiwan News) – As the violence intensifies in Hong Kong, some analysts fear that investors might withdraw from the global market.

Mark DeCambre, the stock market editor of "MarketWatch," mentioned in an article that the Chinese government might brutally crack down on the protests in Hong Kong as it did in Tiananmen Square in 1989. Such an extreme reaction might, in turn, disturb the global market, according to the Liberty Times.

Hong Kong is a major financial center, thus "its disruption could have implications for markets in Asia as well as spill over into Europe and the U.S.," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. He believes that the US Congress might not be willing to overlook any harsh action against the protesters by China.

The unrest in Hong Kong could also push the US and China even further away from reaching an agreement to end the yearlong trade war. If Beijing violently cracks down on the protest, "Markets would have to become less hopeful of the degree and speed of progress possible on a whole host of fronts, including trade," said Ken Odeluga, a market analyst at City Index.

Analysts have also said that China will not tolerate the protests at the Hong Kong International Airport forever, and once the violence escalates, the global market will be at grave risk. "The Chinese government hopes that once schools reopen for fall semester, the size of the protests will shrink," noted James Meyer, an analyst at Tower Bridge Advisors.