Asian Markets Fall; Hang Seng Index Leads Losses as Tensions in Hong Kong Remains

Investing.com – Asian equities fell in morning trade on Friday, with Hong Kong stocks leading losses among major markets as tensions in the city remain.

The Hang Seng Index slumped 2% by 10:30 PM ET (02:30 GMT) as tensions over Hong Kong escalated. The city has been rocked by months of political unrest that was sparked by a since-withdrawn extradition bill.

U.S. President Donald Trump that supports anti-government protestors in Hong Kong.

China condemned the action and warned the U.S. that it would take “firm counter measures”. and said attempts to interfere in the Chinese-ruled city were “doomed to fail.”

Traders continued to evaluate the impact of the singing of bills by the news. While Trump and his Chinese counterpart Xi Jinping both expressed a desire to sign a “phase one” trade deal, reports suggested that the signing might not happen before the end of this year.

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

Holger Schmieding, chief economist at Berenberg, told CNBC in an interview today that Hong Kong is the “biggest geopolitical risk out there for markets” at the moment.

“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 EU to do that, so that would prolong the global industrial downturn which is caused by trade tensions,” said Schmieding.

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

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

Another report showed that fell 7.1% during the month, its sharpest fall since 2015. A rise in nationwide sales tax to 10% from 8% that began in Oct. 1 was cited as the reason for the fall.

Meanwhile, 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%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.