Protesters remain on the streets this morning. Hundreds of bus routes were diverted or suspended and schools have closed. Last night, the police did indeed roam the streets. A different scene a few hours ago. Tear gase were firing and pepper spray into the crowds. The biggest clashes in hong kong for years. Minutes we will look at the implications of the market and the reaction from beijing. And what we can expect over the next few days. David, the in biggest protest since hong kong was handed back to china. What are we looking for . Web and talking about this with angie for all morning. We are expecting a fall. Extent, investors havent registered yet. You look at the hong kong dollar, the first indication of how investors will be treating this as far as risks, already reflecting signs of concern. A big spike up in the hong kong dollar at the Exchange Rate, meaning we are seeing a weakness in the hong kong dollar. It is a very narrow band, though. In the broader scheme of things. Relatively speaking, we do not see this often. We are poised for the biggest threeday drop in the hong kong dollar since 2011. Also seeing it in the offshore market. Similar moves. Minutes, hang seng index, 36 is financials. 12 consumer stocks. We will be getting further evidence later on, is on top of this, the fundamentals have not really clicked in hong kong. Slowing chinese economy, less buyers, retail sales have fallen. Not have an independent Monetary Policy to shore up confidence. When analysts have been pointing out what analysts have been senging out is the hang volatility index. More than what happens to equities this will show you whether stocks are starting to buy insurance over the days to come. , where the closures Hong Kong Market is, it is hard to get to. The thing is, will the markets open . They will open. Their said last night that there is no reason to shut down trade today. They did reiterate that they would offer the usual financial markets. Equities and bonds and futures will be trading as usual. The only thing is that it is hard to get to central right now. Of a lot ofents roads leading into the Central Business district are shut. It is difficult to get to work this morning. I was out there 10 minutes ago and they ran into people who undergo 30 or 40 minutes to go into central, because very few taxes wanted to come here who had to go 30 or 40 minutes to get into central, because very few taxis wanted to come here. Inconvenience and it shows you how difficult it is for business to remain normal. These are the images coming through. It is rather peaceful, obviously. For those watching us outside of hong kong, that is the main store. This is the main shopping district. To the north goes into the financial district. These are the government buildings on the righthand side. It is actually completely different than the scenes last night. Which were clashes with the police. Tear gas. To the left, what youre looking at, several banks. Shift tment park is part is shifting. Branches are shutting because of the peaceful protest. Thank you david. Meanwhile,jing, having a little to say about the escalating protests. Steve with the latest. Little comment, but i am sure there is a lot behind the scenes. Surely they are watching what is happening in hong kong, and it is troubling to the chinese leadership. Is it trying their patients . That is the dangerous question. When you are the streets of admiralty, you get the rumormongering. Will be troops be unleashed from the tla will the troops the unleashed from the pla . Speculation runs. The chairman has dismissed rumors that the government plans to call in the Peoples Liberation army. The State Government says that it is confident that the Hong Kong Government can handle the movement lawfully. That he Central Government uses often, that things must be done according to the law. Whose law is the question. They oppose illegal activities that could undermine jeopardize social tranquility. Undermine a law and jeopardize social tranquility. This is as close as we are going to get to an official statement from china. It says, the risks are temporary in the big picture of stability. Stabilityrisks but hong kong stability doesnt face risks does base risks. Are confident that hong kong will not face a situation similar to those in the ukraine or thailand. There is no doubt that hong kong will push forward political reforms. The people that break the laws will have to bear legal liability. Last week the president met behind closed doors with hong ings biggest tycoons here beijing, where he stressed that any political change must be in strict accordance with the basic law. Ruling out demands by prodemocracy activists to have a nomination system for the chief executive opened up. Down theh beijing may law, saying that only candidates acceptable to the Central Government would be allowed to run. That is basically the position from beijing. Regardlessagree that of what happens in hong kong, beijing will not allow hong kong to choose anybody to be the chief executive. Generally, what is actually being said in the media . Not much. Thate getting reports other social Media Services like instagram have been blocked here along with facebook and twitter, which have been blocked for some time. Of thisnot want word and photos sparking similar protest on the mainland. Not much in the state media other than what i just mentioned from global times. Oneliner, calling on experts to Deepen Research on hong kong issues and promote the interval of one country into systems. And to systems. I asked someone on the way to work what they thought about what is happening in hong kong, and he said that, what is happening in hong kong . He said he had not heard anything. China our china correspondent. Numbers declining for the first time in two years. Slowdowns, production, we and, and factory prices weak demand, and factory prices. The Exchange Link is taking steps to prevent people from grabbing too much. After the move does, after the Hong Kong Exchange has received feedback about what it calls mischievous behavior. They think is scheduled to start next month the link is scheduled to start next month. Softbank is trying to buy Dreamworks Animation. Softbank, which controls a sprint, has been looking for more Media Investment in the u. S. Treasury wise there is talk of a takeover. This has been since may the 20th. Shares are taking a pounding and they rejected a bid. There was a revised offer from kkr. Later they were said to match the offer. Shares are down about 14 . Kong. Otests in hong that is the question will ask coming back from the break. We can bring you live images of the calm after the storm after last nights protest. The prodemocracy protests shut down much of Central Hong Kong. The situation remains fairly similar. If we can get over to roslyn chen, she is in Central Hong Kong. Give us an idea of what is going on. Now, there are still thousands of protesters out here on the streets of admiralty, on the edge of the financial district, and outside of the government complex. It is very calm right now. People are sitting, quietly resting. Occasionally there is a rallying cry. They are asking for chief executives to step down. People are seeking shade because it is getting hot out here. What is very effective is that they are just occupying this whole eight or nine lane set of streets behind me. And they are not allowing any traffic or any transport through. Buses have be diverted and no cars can get through. Have to be diverted and no cars can get through. The police try to convince the protesters to let them through and the protester said no. The police had to leave their van behind. The same thing is happening further down the road. Calm and,h things are nothing like what we saw yesterday, the intense clashes, gas and tear pepper spray, that is not going on. But they are being effective in terms of cutting things down which is difficult for people trying to get to work. I see a few people around me trying to get to their offices. Protesters had hoisted the chinese flag upside down. For a few seconds only. And then it was lowered and we hoisted the right way up. Roslyn chen. In Central Hong Kong. Lets look at this have a look at this, the current outlook for china. With our next guest. With Central Hong Kong being closed down, tell me something. What is this doing to competence in hong kong . We will confidence in hong kong . Will have to wait and see. Reviewed ratings and reaffirmed a aaa with a stable outlook. We see an excavation escalation of disturbances to the point where growth is weakened or we have concerns about the basic stability, that could be a negative rating trigger. I was just talking to our china correspondent who quoted the vice premier. Comment saying that they should be promoting the idea of one country and to systems. And two systems. What kind of messages that . Message is that . That comes down to how the territory is governed, and it comes down to how it works in practice. I think the question for the Credit Outlook is to what extent the two sides can find common ground. Does this affect china to any major extent or can they brush this off . I think it is much more important for hong kongs economy and Credit Outlook than that of china in the first instance. Although in the interconnected world, i am sure the people in not just china but in the world as a whole will be looking at how the situation plays out in hong kong. Kong,ing away from hong looking at the chinese reform process, how are you looking at that . I think that the july and august data has come to a shock to commentators. That must play into the way that you view the rating of china. I think that the credit numbers and the production forers, the Investment Data july and august, surprised many analysts. What we have been saying to people is that there has been much talk about rebalancing away from investments towards consumption. If you want rebalancing, this is what it looks like. Although some of the activity numbers were weak, retail sales and grew retail sales grew. Speed for thatgh rebalancing to take place . Is a good enough is that good enough . We view it as a race between it reform and rebalancing. In the areas that china has been over engaged in, investments, particularly real estate, as they slow down at the governments encouragement, the question is can the other sectors expanded sufficiently quickly to pick up the slack . That is the whole question, and that is what we are looking for. It is still an economy that is being driven by infrastructure spending. If we look at the labor market data, encouragingly, it seems to indicate a tight situation. Which growth has picked up this growth haswage picked up this year in real terms. That its an interesting question for many countries in the region. They are trying to pull off the same trick. But is the emphasis on the structural fundamentals, which we look at more than some others. That is how flexible and responsive the supplyside of the economy is. How strong the institutions are. These will be important in determining whether countries can rise up. The rating remains the same, any changes there . I think if they backtrack, we will view the credit negative. We will take a break. Dollar, the hong kong down. We will look at the Foreign Exchange headlines, coming up in a few minutes. I am david inglis in hong kong. These are your headlines. The top story this morning, thousands of prodemocracy protesters have taken to the streets of hong kong, pumping the biggest crackdown in the city since it was handed to china in 1997. Analysts are expecting a selloff in a few minutes. Keep in mind that the hong kong economy has not been doing well. Later on today we will likely see further evidence of this when we see sales from august. We are respecting to see a seventh straight month of declines expecting to see a seven straight month of declines. South korea released its current account alex for august. Account balance for august. The surplus narrowed, but they were also revised the july surplus lower but they also revised the july surplus lower. Ticket look at the hong kong dollar take a look at the hong kong dollar. We saw a big spike, we will see a lot of weakness. Take a look at the offshore. This one is held its weakness over the last 30 minutes or so. Here is what we are seeing as far as the futures are concerned for the hang seng index. It is in line with what analysts are saying. They are basically saying to expect shortterm pressure. So, as expected, overall, those are the stories driving the markets this morning. We are going to take a look at what is going on in japan. Rescuers continue to search for the victims of a volcanic eruption. They are giving up hope of finding survivors. Jacob joins us from turkey. How much do we know about what happened here . , yesterday the authorities in center dot 31 people had been found that had suffered from cardiac arrest. Were flown off the mountain. Dead,they were declared and rescuers are now working to get up the mountain and bring down the other 27. Much aboutot said what happened to these people, but we do know that there was dust kicked out by the explosion saturday. By the irruption. There were earlier reports of people being buried, and that could lead to deaths. The dust could have made it difficult for people to breathe. What are the rescuers doing today and what challenges are they facing . Well, the topping for the rescuers is that this is still ongoing. The top thing up rescuers is that there are still volcanic activities happening up there. There were sulfuric gases coming out of the crater yesterday. Thank you very much, jacob. Jacob joining us out of turkey with the latest on the volcanic eruption. Up next, Hong Kong Market set before a fall at the start, but will there be longterm consequences for the region . Will put that question to arnold. We will put that question to arnold. Democracy protesters are blocking the streets of hong kong as the markets take a hit. Hollywood beckons. Masayoshi son eyes a new role in tinseltown. The xbox one lands in china as the council ban is lifted. Democracy protesters remain on the streets despite calls for them to go home. Roads have been closed and hundreds of bus routes are diverted. Some schools are shot for the day. A different scene a few hours ago as the police fired tear gas and pepper spray into the crowd. They were the biggest clashes in hong kong perhaps ever as protesters blocked roads and besieged government buildings. Will take a look at the markets. We will take a look at the markets. We are seeing a sharp decline in hong kong, perhaps not as sharp as some had pointed out. We are looking at the open. 23,400, more or less. 300 points is what we have for the opening in hong kong. That is the hang seng index. The me get rid of the and switch along. But me get rid of that and switch it a long. The component index. The shanghai composite, are we seeing a reaction . Not really, in fact it is higher. It is hong kong. The hong kong dollar is spiking up. The weakest level here. That currency does not move too much because of the high trading rate that is allowed to move within. That it is allowed to move within. The weakest level for the hong kong dollar since april of this year. Here are the opening index numbers for the three main benchmarks. These are the chinese stocks listed here in hong kong. The hang seng, the hang seng composite down by the same percentage. Lets get to the heavyweights. The three heaviest weighted stocks on this index. They declined to varying degrees. 4, 5, or six as far as waiting on the hang seng. We are looking at the jewelry stocks were shopping. For shopping. We have retail coming out this afternoon. On top of the protests and the uncertainty that we saw over the weekend, the underlying economy has not done as good or is not in an ideal situation to handle all of these tensions. And of course all of this comes ahead of golden week, october 1. The holiday when we get a flood of mainland tourists coming to hong kong. Will that be impacted . We will have to wait and see. Back to you. We are with someone from asia capital holdings. Any thoughts on the impacts of these . I think the situation has gotten worse faster than people expected, but we are in control. The impact on the stock market will not be long. But on the retail market, because of golden week, i think it may affect the Retail Sector a little bit. What do we do here . In the sense that, how much are people in china aware of what is going on in hong kong . That is the point. Iti think, since there is news filtering at this point in time social media has gone nuts. People may not be aware of the situation. They come here to do the shopping and they will see the blockades and the police. People may stay in the hotel instead. Everything should get back to normal in a few days because we have a Public Holiday here as well, depending on how long they last for. The situation may not be lasting for too long. Just a couple of days. The impact will be when the days arrived. Lets take a look at what is going on anyway. What is the equity market here . I think that the equity market is very conservative at this point in time. Because we already have two Public Holidays in this week. I think that investors tend to cash out before the holidays just to avoid things getting worse. How busy are you these days with looking at this Hong Kong Shanghai stock and it stock connect . People have been busy speculating as to when the arrival they will be. So far we have seen the testing. Demand. Ing the so i think that people will be busy doing the testing and a lot of preparation work. This is the thing here as well. Who do you think will benefit more, the Hong Kong Market or the shanghai market . I think that it is obvious that the a shares will benefit more. 0. 85 of asian investors qualify. I talked to many investors were interested in investing in hong kong shares but they are very weak, and they have lost a lot of money. To begin with, it will be quite limited. It will be broadened, will it not . I think so. For the asian market, i think there is a bar