Asian shares were modestly lower Thursday after President Donald Trump signed a bill expressing support for human rights in Hong Kong.
China reacted with indignation to the legislation, which Congress passed with overwhelming support. Beijing summoned U.S. Ambassador Terry Branstad for a dressing down and issued multiple statements threatening unspecified countermeasures.
In Hong Kong, where sometimes violent protests have dragged on for nearly six months, the Hang Seng index HSI, -0.22% edged 0.1% lower to 26,921.58. The Shanghai Composite index SHCOMP, -0.47% lost 0.5% to 2,889.10.
Trump’s move did not come as a surprise, given the pressure from lawmakers to support the largely symbolic measure. But it’s unclear if the human rights bill, which Beijing views as “meddling” in China’s internal affairs, might derail recent progress in trade talks with Washington.
“We urge the U.S. to not continue going down the wrong path, or China will take countermeasures, and the U.S. must bear all consequences,” the Chinese Foreign Ministry said in a statement.
Markets appeared to be taking the developments in stride, said Stephen Innes of AxiTrader, “on the assumption that the U.S. legislation is unlikely to torpedo phase one. But of course, it does provide a stark reminder that on one level or another, U.S.-China frictions are always going to be a thorn in the markets’ side.”
Japan’s Nikkei NIK, -0.12% slipped 0.1%, while South Korea’s Kospi 180721, -0.43% retreated 0.4%, while benchmark indexes in Taiwan Y9999, -0.26% , Singapore STI, -0.46% and Malaysia FBMKLCI, -0.21% were mostly lower. Australia’s S&P/ASX 200 XJO, +0.20% rose 0.2%.
Among individual stocks, Panasonic 6752, +2.82% surged in Tokyo trading after a report that it will sell its money-losing semiconductor business to Taiwan’s Nuvoton Technology 4919, +0.53% . Rakuten 4755, +2.25% and Hitachi 6501, +1.83% also rose. In Hong Kong, Tencent 700, +0.90% and Sunny Optical 2382, +4.20% gained, while China Mobile 941, -1.63% and casino operator Galaxy Entertainment 27, -2.14% declined. SK Hynix 000660, +0.12% edged up in South korea while LG Electronics 066570, -0.70% slipped. Beach Energy BPT, +2.15% rose in Australia, while Westpac WBC, -0.44% inched down after Reuters reported it would refund some shareholders who bought stock before it was accused of money laundering.
U.S. markets will be closed Thursday for Thanksgiving. They’ll be open for a half day on Friday.
On Wednesday, investors capped a day of light trading on Wall Street ahead of the Thanksgiving holiday by serving up another set of stock market record highs.
The S&P 500, Dow Jones Industrial Average and Nasdaq composite closed at all-time highs for the third straight day Wednesday. And the Russell 2000 index of smaller companies hit its highest level in a year.
A batch of positive U.S. economic data helped spur the broad rally, extending the market’s recent string of gains.
Stock indexes have been breaking records in recent weeks as the U.S. and China signaled that negotiations aimed at resolving their costly trade war were going well.
The latest economic data helped keep investors in a buying mood. The Commerce Department said Wednesday that the economy grew at a 2.1% rate last quarter, outpacing forecasts. The government also reported a surprisingly good increase in orders to U.S. factories and a pickup in consumer spending.
“This is an environment where we continue an economic expansion, albeit at a somewhat slower rate,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “There is a very positive sentiment around U.S. equity markets.”
The S&P 500 index SPX, +0.42% rose 0.4% to 3,153.63. The Dow DJIA, +0.15% picked up 0.2% to 28,164. The Nasdaq COMP, +0.66% climbed 0.7% to 8,705.18.
The key question in China-U.S. trade negotiations is whether they will be able to reach a deal before Dec. 15, when new tariffs are set to kick in on many Chinese-made items, including smartphones and laptops.
Pressure is building on both sides to complete a limited “phase one” deal before the deadline, though the Trump administration could end up postponing it, as it did in October, to allow more time for talks.
Benchmark crude oil CLF20, -0.67% lost 27 cents to $57.84 per barrel in electronic trading on the New York Mercantile Exchange. It fell 30 cents to settle at $58.11 a barrel on Wednesday. Brent crude oil BRNF20, -0.73% , the international standard, gave up 20 cents to $62.81 per barrel.
The dollar USDJPY, -0.10% slipped to 109.46 Japanese yen from 109.54 yen on Wednesday.
https://www.marketwatch.com/story/asian-markets-mixed-as-china-us-tensions-tick-up-over-hong-kong-bills-2019-11-27
2019-11-28 07:38:00Z
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