Asia report: Markets finish lower as Trump signs HK bills
Most markets in Asia finished in the red on Thursday, as sentiment on the US-China trade front wavered after Donald Trump signed two bills into law in the US overnight, which backed protestors in the ongoing political violence in Hong Kong.
In Japan, the Nikkei 225 was down 0.12% at 23,409.14, as the yen strengthened 0.04% against the dollar to last trade at JPY 109.50.
Looking at the benchmark’s major components, SoftBank Group was up 0.42%, while Fanuc was down 1.21% and Fast Retailing lost 0.16%.
Electronics maker Panasonic was 2.82% higher, after a report from the Nikkei Asian Review suggested the firm was planning on selling its semiconductor division to Nuvoton Technology of Taiwan.
The broader Topix index was 0.17% lower by the end of play in Tokyo, closing at 1,708.06.
On the mainland, the Shanghai Composite was 0.43% weaker at 2,889.69, and the smaller, technology-focussed Shenzhen Composite slipped 0.26% to 1,597.85.
South Korea’s Kospi was off 0.43% at 2,118.60, while the Hang Seng Index in Hong Kong was off 0.22% at 26,893.73.
Chinese technology giant Alibaba continued its rocket-fuelled gains in Hong Kong, rising 5.59% two days after its debut on the market became the largest of the year so far.
The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 1.72% and SK Hynix ahead 0.12%.
Overnight, US president Donald Trump signed two bills into law which backed pro-democracy protestors in Hong Kong, even though Beijing had raised objections to the bills in its ongoing trade negotiations with Washington.
The government of Hong Kong also expressed its opposition to the laws on Thursday, claiming it would send the wrong signals to those protesting in the special administrative region of China.
It was a setback to sentiment, which was boosted in recent days by positive murmurs from both sides of the Pacific on the ongoing trade talks.
Trump said on Tuesday that the two sides were close to reaching a first phase trade deal, following phone calls between negotiators in which they were attempting to hash out remaining “core issues”.
The Chinese Ministry of Foreign affairs responded to the passing of the bills on Thursday, by accusing the US of having "sinister intentions", before warning that the new law would "only make the Chinese people more united and make the American plot doomed to fail".
IG analyst Joshua Mahony said the possibility of sanctions in the event of human rights abuses in Hong Kong signalled a willingness to stand against the Chinese, at a time when markets were hoping for the two sides to find common ground.
“The notion that such a deal is imminent appears to be dubious given this latest step, yet the weakness we are currently seeing for stocks will likely fade as the topic moves out of the headlines.
“Unless the Chinese begin a military crackdown or decide to retaliate against the US, this topic will likely fade away as an issue soon enough.”
Oil prices were lower as the region went to bed, with Brent crude last down 0.52% at $63.73 per barrel, and West Texas Intermediate off 0.42% at $57.87.
In Australia, the S&P/ASX 200 went against the regional trend, finishing 0.2% firmer at 6,864.00 by the end of trading.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.8% to reach a fresh record high of 11,273.22.
The down under dollars were a mixed affair against the greenback, with the Aussie last 0.05% weaker at AUD 1.4766, as the Kiwi advanced 0.07% to NZD 1.5567.