File photo: VCG

The Hong Kong stock market extended recent losses on Monday, the first trading day of September, in contrast with the strong rally of A-shares in the Chinese mainland, and analysts said that the declines in Hong Kong were caused by the social unrest that has lasted more than two months.

The Hong Kong Hang Seng Index, which dropped 1.74 percent to 25,724.73 points last week, closed 0.38 percent down to 25,626.55 points on Monday, while A-share markets rallied despite fresh US tariffs on Chinese goods. The Shanghai Composite Index closed up 1.31 percent to 2,924.11 points.

The Hang Seng Index saw a decline of 2.68 percent in July and a loss of 7.39 percent in August. The city's social order and economy have suffered severe consequences from the social unrest that has lasted 13 consecutive weekends.

The local public utility sector, consumption sector and real estate sector led the losses on Monday after 32 stations of the local MTR and airport were vandalized by radical rioters over the past weekend.

The composite index of the city's key industries was also affected, with the local public utility sector closing 1.35 percent down, the consumption index falling 1.02 percent, the real estate sector easing 0.73 percent and the financial sector index declining 0.36 percent on Monday.

Shares of Hong Kong's railway operator, MTR Corp, fell 3.08 percent to HK$44.00 ($5.61) on Monday. As violence has persisted, MTR shares have fallen 13.93 percent in the past two months.

Sun Hung Kai Properties, a local real estate developer, dropped 2.79 percent to HK$108.00 on Monday.

The dramatic contrast between the strong rally of A-shares in the mainland and the further decline of Hong Kong shares has led to a valuation gap, but it is hard for investors to rebuild confidence in Hong Kong shares unless the unrest is stopped, according to analysts.

The recent losses by Hong Kong shares obviously show that the local economy and investors' confidence have been severely hurt by the radical rioters' behavior, they said.

It will be hard for the Hang Seng Index to rebound unless social order is restored in Hong Kong, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Monday.

The Hong Kong market has touched a very low level, which fully reflects the risks brought on by the unrest, said Li Daxiao, chief economist at Shenzhen-based Yingda Securities. Local companies have been hit harder than companies from the mainland.

A weekly review of the Hong Kong stock market by Guangzhou Securities Co said that Hong Kong's economy is facing downward pressure from the unrest and the China-US trade war. The Hong Kong stock market is expected to fluctuate between 24,800 points and 27,000 points in the short term, it said.