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23 May, 2020 12:20:57 PM

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Hong Kong shares tumble as Beijing moves to tighten its grip

Independent Online/AFP
Hong Kong shares tumble as Beijing moves to tighten its grip

Wall Street and European stocks ended mixed on Friday following heavy losses in Hong Kong over China’s push for a national security law that drew rebukes from the United States and Europe.

On the first day of its rubber-stamp parliament’s congress, China unveiled proposals to strengthen “enforcement mechanisms” in Hong Kong after the city was last year rocked by seven months of massive — and sometimes violent — pro-democracy protests.

Hong Kong’s main stock index closed down more than five percent, with financials and property firms battered as investors fretted about the city’s economic future.

“Riots in the street and plummeting real estate markets might be the least of Hong Kong’s building wall of worry as this authoritarian national security plan will most certainly bring into question (the city’s) status as a global banking center,” said Stephen Innes of AxiCorp.

Beijing’s move drew sharp criticism from US Secretary of State Mike Pompeo, while the European Union called for “the preservation of Hong Kong’s high degree of autonomy.”

Later Friday, the US announced sanctions against a Chinese government institute and eight companies for human rights violations against Uighurs and other minorities in China’s western Xinjiang region.

While market watchers expect US President Donald Trump to continue to attack China as his re-election campaign heats up, investors are skeptical he will take action that threatens the trade detente with Beijing.

Adding tariffs on Chinese goods would hit US consumers and “the market is skeptical Trump will risk that before November,” said Gregori Volokhine of Meeschaert Financial Services.

US stocks finished mostly higher, with the tech-rich Nasdaq Composite Index leading major indices, gaining 0.4 percent to finish at 9,324.59, an increase of more than 3.4 percent for the week.

European bourses finished the session little changed.

But the rising US-China tensions weighed on the oil market, which was also pressured by China’s move to avoid offering a 2020 growth target in light of the coronavirus’s disruptions.

The Chinese government usually sets economic growth targets that it then exceeds.

The move underscores the damage to the global growth outlook, with China’s economy hit not only by the pandemic but by weaker conditions in key export markets such as the United States and Europe.

Key figures at 2100 GMT 

New York – Dow: DOWN less than 0.1 percent at 24,466.16 (close)

New York – S&P 500: UP 0.2 percent at 2,965.45 (close)

New York – Nasdaq: UP 0.4 percent at 9,324.59 (close)

London – FTSE 100: DOWN 0.4 percent at 5,993.28 (close)

Frankfurt – DAX 30: UP 0.1 percent at 11,073.87 (close)

Paris – CAC 40: UNCHANGED at 4,444.56 (close)

EURO STOXX 50: UNCHANGED at 2,905.47 (close)

Tokyo – Nikkei 225: DOWN 0.8 percent at 20,388.16 (close)

Hong Kong – Hang Seng: DOWN 5.6 percent at 22,930.14 (close)

Shanghai – Composite: DOWN 1.9 percent at 2,813.77 (close)

West Texas Intermediate: DOWN 2.0 percent at $33.25 per barrel

Brent North Sea crude: DOWN 2.6 percent at $35.13 per barrel

Euro/dollar: DOWN at $1.0904 from $1.0950 at 2100 GMT

Dollar/yen: DOWN at 107.56 yen from 107.61 yen

Pound/dollar: DOWN at $1.2167 from $1.2223

Euro/pound: UP at 89.60 pence from 89.59 pence

BK

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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