US-China tensions rise over Hong Kong

European markets traded lower Friday amid strained relations between the U.S. and China over protests in Hong Kong.

The pan-European Stoxx 600 pared early losses to return to the slide lower during afternoon trade. Basic resources dropped more than 1% to lead losses while technology stocks gained 0.2%.

Sentiment was dampened by a recent escalation in tensions between Washington and Beijing after U.S. President Donald Trump signed legislation in support of the Hong Kong protesters. China’s foreign ministry responded, claiming the U.S. had “sinister intentions.”

Shares in Asia fell on concerns that the news could lessen the chances of the world’s two largest economies reaching an initial “phase one” trade deal. MSCI’s broadest index of Asia-Pacific shares excluding Japan sank 1%.

Back in Europe, French President Emmanuel Macron renewed his criticism of NATO Thursday, defending his claim the military alliance was suffering a “brain death.”

Next week will be a busy one in geopolitics, with NATO due to meet for its 2019 summit and Trump set to meet Queen Elizabeth II in London.

In terms of data, U.K. figures released Friday showed consumer confidence remained stuck at its lowest level since 2013 in November, amid uncertainty over the Dec. 12 general election.

Meanwhile, French GDP grew by 0.3% in the third quarter, in line with preliminary estimates.

British online supermarket Ocado was the largest individual stock mover, jumping 9.7% after it entered the Asian market by signing a tech partnership with Japan’s Aeon.

At the other end of the Stoxx 600, DNB stock fell 6.4% after Norwegian police announced an investigation into the bank over Icelandic money-laundering allegations.

Sweden’s Aak slid 3.7% while U.K. financial advice group St. James’s Place saw its stock fall 2.7%.

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