The major Asian stock indexes finished lower on Thursday with the Australian share market bucking the trend. The markets also failed to follow Wall Street’s lead from Wednesday’s session. Traders said Asian shares were likely pressured by fear of retaliation by China after U.S. President Trump signed bills backing protesters in Hong Kong into law on Wednesday.
In Japan, the Nikkei 225 Index settled at 23409.14, down 28.63 or 0.12%. Hong Kong Hang Seng Index closed at 26893.73, down 60.27 or -0.22% and South Korea’s KOSPI Index finished at 2118.60, down 9.25 or -0.43%.
China’s Shanghai Index settled at 2889.69, down 13.50 or -0.47% and Australia’s S&P/ASX 200 Index closed at 6864.00, up 13.40 or +0.20%.
Trump Signs Bills Backing Hong Kong Protestors into Law
President Donald Trump signed two bills supporting the Hong Kong protesters into law on Wednesday, despite Beijing’s repeated objections.
“I signed these bills out of respect for President Xi, China, and the people of Hong Kong. They are being enacted in the hope that Leaders and Representatives of China and Hong Kong will be able to amicably settle their differences leading to long-term peace and prosperity for all,” Trump said in a statement released by the White House.
China Condemns U.S. Actions
Beijing has repeatedly condemned the legislation as meddling in its domestic affairs. Last week, the “Hong Kong Human Rights and Democracy Act” interferes in China’s domestic affairs, said foreign ministry spokesperson Geng Shuang, according to an online statement in Chinese.
China “strongly condemns and resolutely opposes” the act of interference, Geng said hours after the bill was passes.
Hours after Trump signed the bills, China issued statements slamming the bills, saying they highlight the “sinister intentions and hegemonic nature of the United States,” according to a CNBC translation.
Hong Kong Government Expresses Strong Opposition
On Thursday, the Hong Kong government “expressed strong opposition” to the bill becoming law and it “extremely regrets the U.S. repeatedly ignoring Hong Kong’s concern regarding the two bills,” according to a CNBC translation.
“These two bills are an obvious intervention of Hong Kong’s internal affairs, they are unnecessary and without grounds, they will also harm the relationship and interests between Hong Kong and the U.S.,” the government said in a statement.
A government spokesman also said the bills will send the “wrong message” to protesters, “providing no help to ease Hong Kong’s situation.”
Is it a Deal Breaker?
Thursday’s selling pressure was mild when compared to previous breaks in the stock market in reaction to potentially negative news about a breakdown in talks between the United States and China. The news creates uncertainty, which usually encourages investors to lighten up on risky positions. However, it’s probably not a deal breaker.
The bills were passed a week ago so China had plenty of time to air its objections, and if it wanted to, it could’ve walked away from the negotiation table. Instead, Chinese officials continued to release upbeat statements regarding the trade talks.
This article was originally posted on FX Empire
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