Hong Kong’s authorities announced Monday they were withdrawing riot police from the streets of the protest-wracked city in a major concession to pro-democracy demonstrators.

A statement posted on the government’s website read: “Because citizens gathered on the street have calmed, riot police have been withdrawn.”

The statement also called on protesters “to give up occupied roads as soon as possible for emergency vehicles to pass through and for the partial restoration of public transport services”.

Thousands of protesters have taken control of at least three major thoroughfares, paralysing parts of the city after hours of overnight battles with police firing tear gas.

Throughout Monday morning the police presence has been noticeably more subdued with riot police replaced by smaller numbers of officers in everyday uniforms.

At one protest site in the busy Causeway Bay shopping district there was no visible police presence.

But demonstrators have shown little sign of heeding the government’s call to leave the streets.

The protests Monday took its toll on Hong Kong’s shares as they tumbled and the local dollar hit a six-month low.

As demonstrators refused to back down on their demands for China to grant the city universal suffrage, fears of a long stand-off saw investors sell major banks including HSBC and Standard Chartered.

In response, the stock exchange said trading would continue as normal while the de facto central bank sought to reassure investors by making liquidity available to support the banking system. The city’s financial chief also said the government was tracking events on markets.

However, the Hang Seng Index sank 2.20 percent at one point before paring some of the losses to end 1.90 percent lower.

“We are likely to see (a) major sell-off and volatility for days to come” in the Hong Kong stock market, said a report by New York-based advisory firm JL Warren Capital.

It said those likely to be hurt most would be Hong Kong-listed retailers such as luxury businesses selling products purchased by mainland tourists, and local and Macau tourism businesses.

The protest will be felt especially in the retail sector as the Chinese Golden Week holiday begins on Wednesday — usually a time when big-spending mainlanders visit Hong Kong’s numerous shopping outlets.

ANZ senior economist Raymond Yeung said the protests will “add salt to the wound” of the retail industry, already reeling from a slowdown in the China economy.