Hong Kong led Asia-Pacific markets lower Friday, plunging 5.6% amid reports Beijing will move to tighten its grip on the special administrative region.
Most other markets in the region posted declines of 1% to 2% for the week's final Asian trading session.
The knee-jerk sell-off in Hong Kong was definitely meant "to send a negative message to Beijing," but it also reflects concerns that China's heavy-handed approach will erode the rule of law in Hong Kong, said Stewart Aldcroft, a Hong Kong-based managing director and senior adviser with CitiTrust Ltd.
It could make "many more international and especially U.S. companies reconsider their presence here," he predicted.
A senior Singapore-based analyst, who declined to be named, said for money management firms that set up shop in Hong Kong on the strength of the city's attractions as a financial center, "I don't see anyone leaving lock, stock and barrel." But for newcomers, alternative locations like Singapore will shine brighter now, he said.
Elsewhere in the region, Shanghai stocks dropped 1.89%, Shenzhen fell 2.02%, Tokyo slipped 0.80%, Seoul declined 1.41% and Singapore fell 2.14%.