Hang Seng Index leads losses in Asian markets as tensions in Hong Kong remains

on Nov 29, 2019
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  • Asian equities fell in the morning trade, with Hong Kong stocks leading among the major markets amid increasing tension in the city.
  • Traders continue to evaluate how the signing of the two bills will affect markets.
  • Hong Kong was the biggest geopolitical risk for the markets now.

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On Friday, Asian equities fell in the morning trade, with Hong Kong stocks leading among the major markets amid increasing tension in the city.

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The Hang Seng Index dropped by 2% by 02:30 GMT as tension over Hing Kong escalated. Political unrest has rocked the city for several months since the withdrawals of the extradition bill.

U.S. President Trump supports the anti-government protests in Hong Kong.

China has since condemned the U.S. and promised to retaliate saying attempts to interfere with China ruled the city was doomed to fail.

Traders continue to evaluate how the signing of the two bills will affect markets. Both Trump and his Chinese counterpart- Xi Jinping, have expressed their desire to sign a first trade deal. However, reports suggested that the signing might not happen before the end of this year.

The next batch of tariffs on Chinese goods is due to begin on Dec 15.

The Chief economist at Berenberg, Holger Schmieding, told CNBC in an interview that Hong Kong was the biggest geopolitical risk for the markets now.

If the situation in Hong Kong escalates badly, if we get a Chinese heavy-handed military intervention, then it would be nearly impossible for the U.S. to conclude a trade deal with China — even a stage one deal — it would be nearly impossible for the E.U. to do that, so that would prolong the global industrial downturn which is caused by trade tensions,” said Schmieding.

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China’s Shanghai Composite and the SZSE Component both fell 0.6%.

Japan’s Nikkei 225 dropped 0.2%. Data showed today that the country’s industrial output fell 4.2% in October from the previous month, compared with the median market forecast for a 2.1% fall.

Another report showed that retail sales fell 7.1% during the month, its sharpest fall since 2015. 

A rise in national sales tax from 8% to 10% that began on Oct.1 was cited as the reason for the fall.

Meanwhile, the jobless rate came in at 2.4% in October, unchanged from last month’s figure.

South Korea’s KOSPI lost 1.2%. The Bank of Korea announced on Friday its decision to keep the benchmark interest rate steady at 1.25%, in line with expectations

Down under, Australia’s ASX 200 inched up 0.1%.

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