Shares stumble as China-US row over Hong Kong clouds trade deal outlook
Nikkei stock index
Globalsharesslid on Thursday as a freshrowbetween Washington and BeijingoverUSbills onHongKongcould complicate theirtradenegotiation and delay a "phase one"dealthat investors had initially hoped to be inked by now.
MSCI's broadest index of Asia-Pacificsharesoutside Japan fell 1.2 per cent, withHongKong's Hang Seng shedding 2per centwhile Japan's Nikkei dropped 1.6 per cent. Chinese mainlandsharesdropped 0.6 per cent.
USfuturesdropped 0.5per centin Asiantrade, a day after MSCI's broadest gauge of world stocks fell 0.4 per cent, the biggest fall since early October. On Wall Street, all three major indexes fell, with the losing 0.38 per cent.
TheUSHouse of Representatives on Wednesday passed two bills intended to support protesters inHongKongand send a warning toChinaabout human rights.
"Chinawill surely take this as interference into its domestic affairs and is likely to think it will no longer need to make concessions ontrade," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
The move came astradeexperts and people close to the White House said completion of a "phase one"US-Chinatradedealcould slide into next year, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own.
Trump said on Oct. 11 that thedealcould take as long as five weeks, and investors had initially expected an agreement by mid-November.
Asked Wednesday about the status of theChinadeal, Trump told reporters in Texas: "I don't think they're stepping up to the level that I want."
Tradejitters sent the 10-yearUSTreasuries to yield down to 1.707 per cent, near its lowest levels in three weeks and down more than 25 basis points from a Nov. 7 peak of 1.973 per cent, a three-month high.
Similarly in the currency market, the yuan hit three-week lows, trading as low as 7.0450 to the dollar in onshoretrade.
The dollar slipped 0.3 per centagainst the yen to 108.31, compared to this week's high of 109.07 touched on Monday, while safe-haven gold edged up 0.26 per cent to $1,474.9 per ounce.
The euro was little changed at $1.1075
Tomoo Kinoshita, chief economist at Invesco Asset Management in Tokyo, said the market is unlikely to completely give up hopes on thetradedeal.
"There have always been some uncertainties intradetalks but that won't erase positive effects from signs of bottoming out in the global manufacturing sector," he said.
The minutes from the Federal Reserve's previous policy meeting published on Wednesday offered little guidance on what would cause policymakers to change their minds on theoutlookafter an increasingly divided Fed decided to hit pause in its easing cycle.
Oil prices also dipped, paring some of their 2 per centgains made on Wednesday after a better-than-expectedUScrude inventories report and as Russia said it would continue its cooperation with OPEC to keep the market balanced.
Global benchmark Brent futures dropped 0.4 per centto $62.16.USWest Texas Intermediate (WTI) crude futures were down 0.39 per centat $56.79 per barrel in early Thursdaytrade.