LONDON: Stock markets slid on Thursday after US lawmakers passed a bill supporting civil rights in embattled Hong Kong, possibly jeopardising delicate Chinese-American trade talks.
Investors, already nervous about the slow progress of the talks, became even more cautious after both houses of Congress overwhelmingly approved the bill and sent it to be signed by US President Donald Trump.
“A third day in the red for equity markets as the US-China trade deal, or lack of, continues to dictate market sentiment,” said Craig Erlam, senior market analyst at Oanda trading group.
Key European markets closed in the red, and on Wall Street the Dow Jones index was also lower in the late New York morning.
China on Thursday accused the United States of seeking to “destroy” Hong Kong and threatened retaliation after Congress passed legislation supporting the pro-democracy movement that has thrown the city into nearly six months of turmoil.
Foreign Minister Wang Yi said passage of the Hong Kong Human Rights and Democracy Act “indulges violent criminals” that China blames for the worsening unrest and aims to “muddle or even destroy Hong Kong”.
Sensitive markets: “Recent moves in stock markets seem to be almost solely driven by the latest developments in US-Sino talks,” said XTB chief market analyst David Cheetham.
“It’s quite remarkable that stock markets in not only New York and Shanghai, but also London and Frankfurt, have such a heightened level of sensitivity in the near term to any news on this front.”
Among individual share moves, investors cheered the market debut of stock in France’s state-owned lottery monopoly, with eager buyers pushing the stock up sharply.
Published in Dawn, November 22nd, 2019