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Battle for Hong Kong Is Shifting to City’s Financial Markets

  • Hang Seng Index has worst month versus world since 1998
  • Mainland funds are helping shore up city’s battered stocks
A screen displays the Hang Seng Index in Hong Kong, on May 29.
A screen displays the Hang Seng Index in Hong Kong, on May 29.Photographer: Lam Yik/Bloomberg
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The struggle to maintain confidence in Hong Kong’s future is manifesting in its stock and currency markets.

Waves of mainland capital are flooding into equities, especially megacap Chinese banks, countering losses sparked by sweeping national security legislation. Tension is also building in the foreign exchange market, where options and forwards show the pegged currency will reach the weak end of its trading band.